Diabetic nephropathy (DN) is a serious complicating factor in human type 2 diabetes mellitus (T2DM), and it commonly results in end-stage renal disease (ESRD) that requires kidney dialysis. Here, we report that the α7 nicotinic acetylcholine receptor (α7nAChR) agonist GTS-21 exerts a novel anti-inflammatory action to ameliorate DN, as studied using an inbred strain of Leprdb/db mice in which hyperglycemia and obesity co-exist owing to defective leptin receptor (Lepr) signaling. For this analysis, GTS-21 was administered to 10–12 week-old male and female mice as a 4 mg/kg intraperitoneal injection, twice-a-day, for 8 weeks. Kidney function and injury owing to DN were monitored by determination of plasma levels of BUN, creatinine, KIM-1 and NGAL. Histologic analysis of glomerular hypertrophy and mesangial matrix expansion were also used to assess DN in these mice. Concurrently, renal inflammation was assessed by measuring IL-6 and HMGB1, while also quantifying renal cell apoptosis, and apoptotic signaling pathways. We found that Leprdb/db mice exhibited increased markers of BUN, creatinine, NGAL, KIM-1, IL-6, cytochrome C, and HMGB-1. These abnormalities were also accompanied by histologic kidney injury (mesangial matrix expansion and apoptosis). Remarkably, all such pathologies were significantly reduced by GTS-21. Collectively, our results provide new evidence that the α7nAChR agonist GTS-21 has the ability to attenuate diabetes-induced kidney injury. Additional studies are warranted to further investigate the involvement of the vagal cholinergic anti-inflammatory reflex pathway (CAP) in ameliorating diabetic nephropathy.