Background Diabetic nephropathy is one of the important causes of end-stage kidney disease (ESKD). Of the various cytokines playing a role in the pathogenesis of diabetic nephropathy, transforming growth factor beta-1 (TGF-β1) is an important one. Its major role is to mediate extracellular matrix deposition. Increased renal expression of TGF-β1 is found in diabetic nephropathy and its urinary excretion can serve as a useful marker of outcomes. Material and methods A prospective observational study was conducted, which included 10 cases of diabetic nephropathy in group A with age ≥ 18 years and a urinary protein creatinine ratio (UPCR) value of > 0.5 mg/mg and 10 healthy controls in group B. Patients with active urinary tract infection, chronic kidney disease (CKD) stage Vd patients on maintenance hemodialysis, and renal transplant recipients were excluded from the study. Urinary TGF-β1 level estimation in a 24-hour urine sample, 24-hour urine protein, and other baseline laboratory investigations were done. Results In diabetic nephropathy cases (group A), the mean value of urinary TGF-β1 levels was 88.33± 12.44 ng/24 hours. In the control group (group B), the mean value of urinary TGF-β1 was 29.03 ± 3.23 ng/24 hours. Urinary TGF-β1 levels were significantly elevated in group A as compared to group B (p<0.001). There was no significant correlation between urinary TGF-β1 levels andestimated glomerular filtration rate (eGFR) (r=0.376, p= 0.285) as well as the urinary TGF-β1 levels and 24-hour urine protein levels (p = 0.334, r = 0.341) in diabetic nephropathy cases. Glycosylated hemoglobin (HbA1c) levels didn't correlate with the urinary TGF-β1 levels (r = -0.265, p = 0.46). Conclusion The urinary TGF-β1 levels were significantly elevated in diabetic nephropathy patients as compared to healthy controls. There was no significant correlation between urinary TGF-β1 levels and proteinuria,eGFR, or HbA1c levels in diabetic nephropathy patients.