Activation of TLR2 or TLR4 by endogenous ligands such as high mobility group box 1 (HMGB1) may mediate inflammation causing diabetic kidney injury. We determined whether blockade of HMGB1 signaling by: (1) supra-physiological production of endogenous secretory Receptor for Advanced Glycation End-products (esRAGE), a receptor for HMGB1; (2) administration of HMGB1 A Box, a specific competitive antagonist, would inhibit development of streptozotocin induced diabetic nephropathy (DN). Wild-type diabetic mice developed albuminuria, glomerular injuries, interstitial fibrosis and renal inflammation. Using an adeno-associated virus vector, systemic over-expression of esRAGE afforded significant protection from all parameters. No protection was achieved by a control vector which expressed human serum albumin. Administration of A Box was similarly protective against development of DN. To determine the mechanism(s) of protection, we found that whilst deficiency of TLR2, TLR4 or RAGE afforded partial protection from development of DN, over-expression of esRAGE provided additional protection in TLR2-/-, modest protection against podocyte damage only in TLR4-/- and no protection in RAGE-/- diabetic mice, suggesting the protection provided by esRAGE was primarily through interruption of RAGE and TLR4 pathways. We conclude that strategies to block the interaction between HMGB1 and its receptors may be effective in preventing the development of DN.