Diabetic nephropathy (DN) is a common but intractable diabetic microvascular complication. Tripterygium, a Chinses herb, has been proven to be effective for DN treatment. In this review, the efficacy and pharmacological mechanism of tripterygium and its extracts on DN is elucidated. Tripterygium and its extracts could effectively reduce urine protein and protect renal function. Its pharmacological mechanism involves anti-inflammation, anti-oxidation, anti-glomerulosclerosis and anti-fibrosis, which is achieved by balancing the Th1/Th2 cells, regulating macrophage infiltration, and regulating the following pathways: p38 MAPK, NF-κB, TGF-β, Wnt/β-catenin, Akt and Notch1. Although tripterygium and its extracts may result in some adverse effects, including liver-function damage, gastrointestinal reaction, menstrual disorders, and reproductive problems, they are considered good alternative medicines for DN if used with caution and in the proper manner.