Diabetic nephropathy is a leading cause of end-stage renal disease globally, with limited treatment options to prevent its progression. Gambogic acid (GA), a xanthone isolated from Garcinia hanburyi, has shown notable anti-oxidative, anti-inflammatory, and anti-proliferative properties. This study aimed to assess GA’s renoprotective effects in a model of diabetic nephropathy mediated by low dose streptozotocin (STZ) combined with a high-fat diet, focusing on its potential to reduce oxidative stress and inflammation. Control -treated vehicle and STZ/high-fat diet-mediated diabetic rats were administered either the vehicle or 3 or 6 mg/kg of GA to assess its effects on renal inflammation, fibrosis, and oxidative stress. Renal histological changes were assessed, and markers for inflammation and oxidative stress, including I-κBα, p-p38/MAPK, and p-p65NF-κB pathways, were measured to explore the mechanisms of GA. Diabetic rats showed significant renal dysfunction, structural damage, and increased inflammation and fibrosis. Treatment with GA markedly improved renal structure and function. GA also reduced oxidative stress, increased I-κBα expression, and inhibited key signaling pathways, specifically p-p38/MAPK and p-p65NF-κB, involved in cellular inflammation. GA exhibits promising renoprotective effects in diabetic nephropathy by reducing oxidative stress and inflammation, supporting its potential as a natural therapeutic agent for diabetic renal disease.