To explore the construction of a diagnostic prediction model of diabetic nephropathy (DN) in type 2 diabetic patients for prognostic risk prediction and observe the therapeutic effect of Epalrestat combined with Dapagliflozin on DN. The study consisted of two phases, phase I: A retrospective analysis was conducted on the case information and clinical treatment related data of a total of 460 patients who underwent kidney biopsy from June 2018 to June 2021. They were randomly divided into validation queue and training queue. The predictive factors of the diagnostic prediction model were obtained through multivariate logistic regression. An interventional study of 94 patients with DN admitted between January 2022 and August 2023 was conducted, and they were randomized into a control group (n = 47) receiving Dapagliflozin and a research group (n = 47) receiving Epalrestat combined with Dapagliflozin. The glucose metabolism, renal function, and treatment safety of the two groups before and after treatment were compared. In addition, the adverse reactions during the treatment of the two groups were counted. In the phase I of the study, the DN risk model established showed a good performance in the diagnosis and risk assessment of patients with DN and could provide certain reference opinions for future clinical practice. In the phase II of the study, the research group showed better glucose metabolism and renal function than the control group after treatment (P < .05), but no statistical difference was identified between groups in the incidence of adverse reactions (P > .05). Conclusion. Epalrestat combined with Dapagliflozin is significantly effective in the treatment of DN, which can effectively improve glucose metabolism and renal function in DN patients.