Abstract: This work investigated the anti-diabetic nephropathy activities of Paccilomyces hepialid extract,Cs-4,on STZ-induced diabetic sprague-dawley rats. Sprague-dawley rats were orally administered with water extract at 0.05 g/kg,0.5 g/kg and 2 g/kg for 3 weeks,respectively. Then,related biochemical indexes were determined. Data showed that similar as metformin,the high dose group of Paccilomyces hepiali extract could improve the body weight loss caused by diabetes(p<0.05),and displayed a significant reduction in fasting blood glucose,urine glucose and urinary albumin excretion rate(p<0.01). Meanwhile,renal function tests showed that Paccilomyces hepiali extract displayed a significant reduction in BUN,UA and creatinine(p<0.01). The serum SOD activity was enhanced( p < 0. 01) and the MDA level was decreased( p < 0. 01). Pathological morphology reversion in histopathological sections showed that inflammatory cell infiltration was significantly reduced after treatment which confirmed that Cs-4 presents excellent anti-diabetic and anti-nephropathic activities.