We investigated the effect of KIOM-79, 80% ethanolic extract of a new herbal prescription, on non-obese type 2 diabetic Goto-Kakizaki (GK) rats. The rats were treated orally with KIOM-79 (500mg/kg body weight) once a day for 13 weeks to examine the long-term effects on hyperglycemia and glomerular histology as well as biochemical and functional abnormalities in kidney. As the results, we found that KIOM-79 reduced hyperglycemia (p<0.01), ameliorated insulin resistance (p<0.001), urinary protein excretion (p<0.01) and creatinine clearance (Ccr) (p<0.001), and inhibited glomerular AGE formation (p<0.001) in diabetic GK rats. We also found that KIOM-79 prevented the glomeruli enlargement, overexpression of type IV collagen (p<0.001), PKC protein (p<0.01), TGF-β mRNA (p<0.05) and VEGF mRNA (p<0.05). Thus, based on our finding, KIOM-79 could reduce the hyperglycemia, and prevent or retard the development of diabetic nephropathy.