Pentamethylquercetin (PMQ) has been shown to possess glucose-lowering properties, but its effect on renal fibrosis in diabetes is still unclear. This study was designed to investigate the effect of PMQ on renal fibrosis and the underlying mechanisms in spontaneous type II diabetic Goto-Kakizaki rats and mesangial cells in high glucose. We found that in Goto-Kakizaki rats, PMQ treatment attenuated glomerular volume, glycogen deposition, renal collagen and fibronectin accumulation, in addition to amelioration of diabetic symptoms, including reduction of urine volume and urine glucose levels. In mesangial cells, PMQ remarkably inhibited the cell proliferation and total collagen accumulation, and suppressed cell hypertrophy. Further experiments showed that PMQ treatment down-regulated the expression of TGF-β1, up-regulated Smad7 and inhibited Smad2/3 activation in vivo and vitro. Our results demonstrated that PMQ ameliorated renal fibrosis in diabetes, which may be associated with suppressed TGF-β/Smads signaling.