Background: Despite different management strategies, progression of proteinuria occurs in a sizable category of patients with diabetic nephropathy (DN). Increase in serum renin levels induced by the renin-angiotensin system (RAS) may contribute to this. Vitamin D therapy is found to have an inhibitory effect on the RAS. We aimed to study the effects of Vitamin D therapy on renal functions of patients with DN. Methods: This was a double-blind, randomized, placebo-controlled study. Patients with DN (urinary albumin UA >30 mg/g of creatinine) whose estimated glomerular filtration rate (eGFR) was more than 30 mL/min were selected and their plasma renin, parathyroid hormone, serum Vitamin D, serum calcium, serum creatinine, fasting blood sugar were done as baseline measurements. Subjects were randomized into two groups and treatment group was given Vitamin D, 50000 IU (0.25 ml) intramuscularly (IM) monthly for 6 months; control group received distilled water IM. Investigations were repeated after 6 months of therapy. Results: Of 155 patients invited, 85 were randomly assigned to two groups. After 6 months, mean reduction of UA to creatinine ratio in the treatment and control group was 51.8 mg/g (95% confidence interval CI; 66.1-−37.5, P ≤ 0.001); 22.4 mg/g (95% CI; −45.7-0.8, P = 0.06), respectively (between group difference P = 0.001). Significant increase in the eGFR observed in the treatment group while eGFR remained unchanged in the control group (P = 0.03 for the between-group difference). Mean reduction in plasma renin in treatment group and control group was 5.85 pg/mL (95% CI; −6.7-−4.6) (P < 0.001) and 0.95 pg/mL (95% CI; −1.4-−0.14, P = 0.02), respectively. Conclusions: Vitamin D 50000 IU given IM monthly for 6 months reduces urine albumin, serum creatinine, and renin levels in patients with DN.