Diabetic nephropathy (DN) is one of the most common complications in diabetes mellitus and the leading cause of end-stage renal disease. TGF-β is a pleiotropic cytokine and has been recognized as a key mediator of DN. However, anti-TGF-β treatment for DN remains controversial due to the diverse role of TGF-β1 in DN. Thus, understanding the regulatory role and mechanisms of TGF-β in the pathogenesis of DN is the initial step towards the development of anti-TGF-β treatment for DN. In this review, we first discuss the diverse roles and signaling mechanisms of TGF-β in DN by focusing on the latent versus active TGF-β1, the TGF-β receptors, and the downstream individual Smad signaling molecules including Smad2, Smad3, Smad4, and Smad7. Then, we dissect the regulatory mechanisms of TGF-β/Smad signaling in the development of DN by emphasizing Smad-dependent non-coding RNAs including microRNAs and long-non-coding RNAs. Finally, the potential therapeutic strategies for DN by targeting TGF-β signaling with various therapeutic approaches are discussed.