Diabetic nephropathy (DN) is one of the major causes of end-stage renal disease (ESRD), but treatment remains ineffective due to its unclear pathogenesis. The pathogenic role of a risk factor C-reactive protein (CRP) has been increasingly recognized in type-2 DN (T2DN). Recently, a number of studies showed that plasma CRP level can be significantly reduced in diabetic patients by dipeptidyl peptidase-4 (DPP4) inhibitor treatment. A better understanding the underlying mechanism would uncover novel therapeutic targets for ESRD. Expression pattern of renal DPP4 were examined in the human CRP transgenic db/db (CRP-tg db/db), db/db and non-diabetic db/m mice during the development of T2DN. The renoprotective effect of DPP4 inhibition on CPR-driven T2DN was evaluated by treating CRP-tg db/db mice with DPP4 inhibitor Linagliptin. The underlying mechanism was elucidated in the Linagliptin-treated kidneys in vivo and cultured human proximal tubule epithelial HK-2 cells in vitro by IF, Co-IP and ChIP assays. Interestingly, we found that DPP4 expression was increased in the diabetic injured kidney of db/db mice, which further enhanced in the transgenic CRP-tg db/db and associated with a more advanced kidney injury compared with both the db/db and db/m mice. A 12-week-treatment with DPP4 inhibitor Linagliptin significantly ameliorated the renal function loss, inflammation (MCP-1, IL-1beta, TNF-alpha) and fibrosis (Col-I, Col-IV, alpha-SMA) in the CRP-tg db/db mice at 24-week-old. Surprisingly, mechanistic study revealed that CRP not only triggered the dimerization of DPP4 with CD32b in the plasma membrane, but also increased the physical binding of NF-kB on the DPP4 promoter region for transcriptional regulation in human proximal tubule epithelial HK-2 cells in vitro. Unexpectedly, targeting of either DPP4, CD32b or NF-kB with specific inhibitor/blocker can markedly suppressed all these three proteins in the CRP-stimulated HK-2 cells in vitro; suggesting the existence of a novel DPP4/CD32b/NF-kB signaling circuit under CRP-rich condition. More importantly, we demostrated that Linagliptin was capable of shutting down the whole circuit; therefore effectively inhibiting the progression of T2DN in CRP-tg db/db mice in vivo. Here, we discovered a novel DPP4/CD32b/NF-kB signaling circuit and identified its importance in the CRP-driven diabetic kidney injury. Thus, DPP4 may represent as a potential therapeutic target for T2DN-derived ESRD.