DN (diabetic nephropathy) is a chronic disease characterized by proteinuria, glomerular hypertrophy, decreased glomerular filtration and renal fibrosis with loss of renal function. DN is the leading cause of ESRD (end-stage renal disease), accounting for millions of deaths worldwide. TZDs (thiazolidinediones) are synthetic ligands of PPARγ (peroxisome-proliferator-activated receptor γ), which is involved in many important physiological processes, including adipose differentiation, lipid and glucose metabolism, energy homoeostasis, cell proliferation, inflammation, reproduction and renoprotection. A large body of research over the past decade has revealed that, in addition to their insulin-sensitizing effects, TZDs play an important role in delaying and preventing the progression of chronic kidney disease in Type 2 diabetes. Although PPARγ activation by TZDs is in general considered beneficial for the amelioration of diabetic renal complications in Type 2 diabetes, the underlying mechanism(s) remains only partially characterized. In this review, we summarize and discuss recent findings regarding the renoprotective effects of PPARγ in Type 2 diabetes and the potential underlying mechanisms.