MiR-17 is found upregulated in diabetic mice; however, its effect(s) on renal fibrosis of diabetic nephropathy remain(s) unknown. This study aimed to explore the mechanism underlying the downregulation of miR-17 in renal fibrosis of diabetic nephropathy (DN). Patients with diabetes mellitus (DM) and DN and normal healthy individual controls, mice (db/db, db/m), and human mesangial cells (HMCs) and human proximal tubule epithelial cells (HK-2) were used as research subjects in the study. Quantitative real-time polymerase chain reaction (qRT-PCR) was performed to measure the expression of miR-17 in the serum samples, renal tissues and cells. Acid-Schiff (PAS) and Masson staining experiments were performed to detect glomerular mesangial matrix and collagen deposition. Levels of fibrosis-related proteins (E-Cadherin (E-cad), vimentin, fibronectin and collagen I) were measured by Western blot (WB). The target gene of miR-17 was predicted by TargetScan 7.2 and confirmed by dual-luciferase reporter analysis. The study found that miR-17 expression was elevated in the serums of DN patients as well as in the serums and kidney tissues of db/db mice. db/db mice showed a severe renal fibrosis condition. The levels of E-cad in db/db mice, HMC and HK-2 cells were increased by downregulating miR-17 expression, while expressions of vimentin, fibronectin and collagen I were reduced. Smad7 was predicted to be the target gene of miR-17, and its expression was promoted by downregulation of miR-17. Moreover, the reduced Smad7 expression could inhibit the expressions of fibrosis-related proteins, which, however, can be ameliorated by the downregulation of miR-17. In addition, downregulation of miR-17 could suppress renal fibrosis mediated by TGF-β1 through targeting Smad7, which might be a clinical therapeutic target for patients with DN.