Diabetic nephropathy (DN) is a common kidney disease in people with diabetes, which is also a serious microvascular complication of diabetes and the main cause of end-stage renal disease (ESRD) in developed and developing countries. Renal fibrosis is a finally pathological change in DN. Nevertheless, the relevant mechanism of cause to renal fibrosis in DN is still complex. In this review, we summarized that the role of cell growth factors, epithelial–mesenchymal transition (EMT) in the renal fibrosis of DN, we also highlighted the miRNA and inflammatory cells, such as macrophage, T lymphocyte, and mastocyte modulate the progression of DN. In addition, there are certain other mechanisms that may yet be conclusively defined. Recent studies demonstrated that some of the new signaling pathways or molecules, such as Notch, Wnt, mTOR, Epac-Rap-1 pathway, may play a pivotal role in the modulation of ECM accumulation and renal fibrosis in DN. This review aims to elucidate the mechanism of renal fibrosis in DN and has provided new insights into possible therapeutic interventions to inhibit renal fibrosis and delay the development of DN.