Extracellular matrix (ECM) accumulation is considered an important pathological feature of diabetic kidney disease (DKD). Histone deacetylase (HDAC) inhibitors protect against kidney injury. However, the potential mechanisms of HDACs in DKD are still largely unknown. Here, we describe a novel feedback loop composed of HDAC2 and miR-205 that regulates ECM production in tubular epithelial cells in individuals with DKD. We found that HDAC2 mRNA expression in peripheral blood was markedly higher in patients with DKD than in patients with diabetes. Nuclear HDAC2 protein expression was increased in TGFβ1-stimulated tubular epithelial cells and db/db mice. We also found that miR-205 was regulated by HDAC2 and down-regulated in TGFβ1-treated HK2 cells and db/db mice. In addition, HDAC2 reduced histone H3K9 acetylation in the miR-205 promoter region to inhibit its promoter activity and subsequently suppressed miR-205 expression through an SP1-mediated pathway. Furthermore, miR-205 directly targeted HDAC2 and inhibited HDAC2 expression. Intriguingly, miR-205 also regulated its own transcription by inhibiting HDAC2 and increasing histone H3K9 acetylation in its promoter, forming a feedback regulatory loop. Additionally, the miR-205 agonist attenuated ECM production in HK2 cells and renal interstitial fibrosis in db/db mice. In conclusion, the HDAC2/SP1/miR-205 feedback loop may be crucial for the pathogenesis of DKD.