Diabetic nephropathy (DN) involves damage associated to hyperglycemia and oxidative stress. Renal fibrosis is a major pathologic feature of DN. The aim of this study was to evaluate anti-fibrogenic and renoprotective effects of all-trans retinoic acid (ATRA) in isolated glomeruli and proximal tubules of diabetic rats. Diabetes was induced by single injection of streptozotocin (STZ, 60 mg/Kg). ATRA (1 mg/Kg) was administered daily by gavage, from days 3-21 after STZ injection. ATRA attenuated kidney injury through the reduction of proteinuria, renal hypertrophy, increase in natriuresis, as well as early markers of damage such as β2-microglobulin, kidney injury molecule-1 (KIM-1), and neutrophil gelatinase-associated lipocalin (NGAL). The following parameters increased: macrophage infiltration, localization of alpha-smooth muscle actin (αSMA)-positive cells in renal tissue, and pro-fibrotic proteins such as transforming growth factor-β (TGF-β1), laminin beta 1 (LAM-β1), and collagens IV and I. Remarkably, ATRA treatment ameliorated these alterations and attenuated expression and nuclear translocation of Smad3, with increment of glomerular and tubular Smad7. The diabetic condition decreased expression of retinoic acid receptor alpha (RAR-α) through phosphorylation in serine residues mediated by the activation of c-Jun N-terminal kinase (JNK). ATRA administration restored the expression of RAR-α and inhibited direct interactions of JNK/RAR-α. ATRA prevented fibrogenesis through down-regulation of TGF-β1/Smad3 signaling.