Podocyte loss and proteinuria are both key features of human diabetic nephropathy (DN). The leptin-deficient BTBR mouse strain with the ob/ob mutation develops progressive weight gain, type 2 diabetes, and diabetic nephropathy that has many features of advanced human DN, including increased mesangial matrix, mesangiolysis, podocyte loss, and proteinuria. Selective antagonism of the endothelin-1 type A receptor (ETAR) by atrasentan treatment in combination with renin-angiotensin-aldosterone system inhibition with losartan has been shown to have the therapeutic benefit of lowering proteinuria in patients with DN, but the underlying mechanism for this benefit is not well understood. Using a similar therapeutic approach in diabetic BTBR ob/ob mice, this treatment regimen significantly increased glomerular podocyte number compared with diabetic BTBR ob/ob controls and suggested that parietal epithelial cells were a source for podocyte restoration. Atrasentan treatment alone also increased podocyte number but to a lesser degree. Mice treated with atrasentan demonstrated a reduction in proteinuria, matching the functional improvement reported in humans. This is a first demonstration that treatment with the highly selective ETAR antagonist atrasentan can lead to restoration of the diminished podocyte number characteristic of DN in humans and thereby underlies the reduction in proteinuria in patients with diabetes undergoing similar treatment. The benefit of ETAR antagonism in DN extended to a decrease in mesangial matrix as measured by a reduction in accumulations of collagen type IV in both the atrasentan and atrasentan + losartan-treated groups compared with untreated controls.