Backgroud: Diabetic nephropathy is one of the most frequent causes of end-stage renal disease and is associated with proliferation of glomerular mesangial cells (MCs) and excessive production of the extracellular matrix (ECM). Several studies have shown that early growth response factor 1 (Egr1) plays a key role in renal fibrosis by regulating the expression of genes encoding ECM components. However, whether Egr1 also contributes to diabetic nephropathy is unclear. Methods: In the present study, we compared the expression of Egr1 in kidneys from OLETF rats with spontaneous type 2 diabetes and healthy LETO rats. We also examined whether high glucose and TGF-β1 signaling up-regulated Egr1 expression in cultured MCs, and whether Egr1 expression influenced MC proliferation and expression of ECM genes. Results: We found that higher expression of Egr1 and TGF-β1, at both the mRNA and protein levels, the kidneys from OLETF rats vs. LETO rats. High glucose or TGF-β1 signaling rapidly up-regulated expression of Egr1 mRNA and protein in cultured MCs. Overexpressing Egr1 in MCs by transfection with M61-Egr1 plasmid or treatment with high glucose up-regulated expression of fibronectin, type IV collagen and TGF-β1, and promoted MC proliferation. Conversely, siRNA-mediated silencing of Egr1 expression down-regulated these genes and inhibited MC proliferation. Chromatin immunoprecipitation (ChIP) assays revealed that Egr1 bound to the TGF-β1 promoter. Conclusion: Our results provide strong evidence that Egr1 contributes to diabetic nephropathy by enhancing MC proliferation and ECM production, in part by interacting with TGF-β1.