Molecular mechanisms underlying renal complications of diabetes remain unclear. We tested whether renal NADPH oxidase (Nox) 4 contributes to increased reactive oxygen species (ROS) generation and hyperactivation of redox-sensitive signaling pathways in diabetic nephropathy. Diabetic mice (db/db) (20 wk) and cultured mouse proximal tubule (MPT) cells exposed to high glucose (25 mmol/l, d-glucose) were studied. Expression (gene and protein) of Nox4, p22^phox, and p47^phox, but not Nox1 or Nox2, was increased in kidney cortex, but not medulla, from db/db vs. control mice (db/m) (P < 0.05). ROS generation, p38 mitogen-activated protein (MAP) kinase phosphorylation, and content of fibronectin and transforming growth factor (TGF)-β1/2 were increased in db/db vs. db/m (P < 0.01). High glucose increased expression of Nox4, but not other Noxes vs. normal glucose (P < 0.05). This was associated with increased NADPH oxidase activation and enhanced ROS production. Nox4 downregulation by small-interfering RNA and inhibition of Nox4 activity by GK-136901 (Nox1/4 inhibitor) attenuated d-glucose-induced NADPH oxidase-derived ROS generation. High d-glucose, but not l-glucose, stimulated phosphorylation of p38MAP kinase and increased expression of TGF-β1/2 and fibronectin, effects that were inhibited by SB-203580 (p38MAP kinase inhibitor). GK-136901 inhibited d-glucose-induced actions. Our data indicate that, in diabetic conditions: 1) renal Nox4 is upregulated in a cortex-specific manner, 2) MPT cells possess functionally active Nox4-based NADPH, 3) Nox4 is a major source of renal ROS, and 4) activation of profibrotic processes is mediated via Nox4-sensitive, p38MAP kinase-dependent pathways. These findings implicate Nox4-based NADPH oxidase in molecular mechanisms underlying fibrosis in type 2 diabetic nephropathy.