Tubulointerstitial fibrosis (TIF) is involved in the development of diabetic kidney disease (DKD). Transforming growth factor β1 (TGF-β1) is involved in the extensive fibrosis of renal tissue by facilitating the partial epithelial-mesenchymal transition (EMT), increasing the synthesis of extracellular matrix (ECM), inhibiting degradation, inducing apoptosis of renal parenchyma cells, and activating renal interstitial fibroblasts and inflammatory cells. Recent studies indicated that bone morphogenetic protein-7 (BMP-7) upregulated the expression of endogenous SnoN against renal TIF induced by TGF-β1 or hyperglycemia. Nevertheless, the mechanisms underlying the BMP-7-mediated restoration of SnoN protein level remains elusive. The present study demonstrated the increased expression of BMP-7 in diabetic mellitus (DM) mice by hydrodynamic tail vein injection of overexpressed BMP-7 plasmid, which attenuated the effects of DM on kidney in mice. Partial tubular EMT and the accumulation of Collagen-III were resisted in DM mice that received overexpressed BMP-7 plasmid. Similar in vivo results showed that BMP-7 was competent to alleviate NRK-52E cells undergoing partial EMT in a high-glucose milieu. Furthermore, exogenous BMP-7 activated the Smad1/5 pathway to promote gene transcription of SnoN and intervened ubiquitination of SnoN; both effects repaired the SnoN protein level in renal tubular cells and kidney tissues of DM mice. Therefore, these findings suggested that BMP-7 could upregulate SnoN mRNA and protein levels by activating the classical Smad1/5 pathway to refrain from the partial EMT of renal tubular epithelial cells and the deposition of ECM in DKD-induced renal fibrosis.