Diabetic nephropathy （DN） is one of the most serious microvascular complications of diabetes and the leading cause of end-stage kidney disease. The onset and progression of DN are linked to the progression of renal fibrosis which is an important pathological feature and final pathological result of various chronic kidney diseases. As a result， therapies against renal fibrosis can help delay the progression of DN. The transforming growth factor-β₁ （TGF-β₁）/Smad signaling pathway is one of the key pathways in renal fibrosis. TGF-β₁， a crucial mediator of renal fibrosis， is highly expressed in the case of fibrosis-associated kidney diseases， and Smads are the main effectors in the TGF-β₁ signal transduction pathway. By activating Smads， TGF-β₁ transports signals from the cytoplasm to the nucleus and regulates the transcription of fibrosis-related target genes， thus exerting the biological effects and promoting the progression of renal fibrosis. In recent years， Chinese medicine has become prominent in the prevention and treatment of DN， and there has been an explosion of research on Chinese medicine in the prevention and treatment of DN through the TGF-β₁/Smad signaling pathway. Based on literature research， this paper reviewed the basic structure of the TGF-β₁/Smad signaling pathway， the relationship with DN， and monomers and extract of Chinese medicine， Chinese patent medicine， and compound Chinese medicine prescriptions in improving and delaying the renal fibrosis based on the TGF-β₁/Smad signaling pathway， and in alleviating inflammatory response and oxidative stress， reducing the accumulation of extracellular matrix， and inhibiting epithelial-mesenchymal transition by regulating the TGF-β₁/Smad signaling pathway. Thereby， this study is expected to provide new mindset for the treatment of DN.