Osteopontin is a proinflammatory cytokine and monocyte chemoattractant implicated in the pathogenesis of diabetic nephropathy. Synthetic agonists for liver X receptors (LXRs) suppress the expression of proinflammatory genes, including osteopontin, but whether LXR activation modulates diabetic nephropathy is unknown. We administered the LXR agonist T0901317 to mice with streptozotocin-induced diabetes and evaluated its effects on diabetic nephropathy. The LXR agonist decreased urinary albumin excretion without altering blood glucose levels and substantially attenuated macrophage infiltration, mesangial matrix accumulation, and interstitial fibrosis. LXR activation suppressed the gene expression of inflammatory mediators, including osteopontin, in the kidney cortex. In vitro, LXR activation suppressed osteopontin expression in proximal tubular epithelial cells by inhibiting AP-1-dependent transcriptional activation of the osteopontin promoter. Taken together, these results suggest that inhibition of renal osteopontin by LXR agonists may have therapeutic potential for diabetic nephropathy.