PurposeThis study aims to investigate the mechanism underlying the beneficial effects of Huangqi decoction (HQD) on Diabetic kidney disease (DKD) in diabetic db/db mice.MethodsEight-week-old male diabetic db/db mice were randomly divided into four groups: Model (1% CMC), HQD-L (0.12 g/kg), HQD-M (0.36 g/kg), and HQD-H (1.08 g/kg) groups. Non-diabetic db/m mice were served as the control group. These mice received HQD treatment for 8 weeks. After treatment, the kidney function, histopathology, micro-assay, and protein expression levels were assessed.ResultsHQD treatment improved the albumin/creatine ratio (ACR) and 24 h urinary albumin excretion, prevented the pathological phenotypes of increased glomerular volume, widened mesangial areas, the of mesangial matrix proliferation, foot process effacement, decreased nephrin expression and reduced number of podocytes. Expression profiling analysis revealed global transcriptional changes that predicted related functions, diseases and pathways. HQD treatment activated protein expressions of BMP2, BMP7, BMPR2, and active-Rap1, while inhibiting Smad1 and phospho-ERK. In addition, HQD was associated with improvements in lipid deposition in the kidneys of db/db mice.ConclusionHQD ameliorated the progression of DKD in db/db mice by regulating BMP transcription and downstream targets, inhibiting the phosphorylation of ERK and the expression of Smad1, promoting Rap1 binding to GTP, and regulating the lipid metabolism. These findings provide a potential therapeutic approach for treating DKD.Supplementary InformationThe online version contains supplementary material available at 10.1186/s12906-023-04029-1.