Thioredoxin-interacting protein (TXNIP) is an endogenous inhibitor of the antioxidant thioredoxin, and a critical agent in the in vivo regulation of glucose. The well-described induction of TXNIP by high glucose may represent an important pathogenic trigger of complications arising in the diabetic environment, with sustained overexpression of TXNIP triggering the increased production of reactive oxygen species and collagen, both major contributors to the development of diabetic nephropathy (DN). To examine a possible therapeutic role for targeted TXNIP inhibition in DN, transgenic (mRen-2)27 rats were rendered diabetic with streptozotocin and then treated with 20 μM TXNIP deoxyribozyme (DNAzyme) delivered continuously over 12 weeks by an implanted osmotic mini-pump. Renal injury was measured using biochemical parameters of kidney function along with histological markers of damage. Catalytic activity of TXNIP DNAzyme was determined by TXNIP gene and peptide expression in the rat kidneys. TXNIP DNAzyme localization was demonstrated with a fluorescent-labelled TXNIP DNAzyme. A panel of markers was used to assess the extent of oxidative stress and renal fibrosis including superoxide level, nitrotyrosine staining, TGF-β1, NLRP3 and collagen IV expression. Fluorescent-labelled TXNIP DNAzyme was localized to tubulo-epithelial cells, but was not identified in glomeruli or endothelial cells. Elevated renal cortical TXNIP gene and protein expression seen in kidneys of DN animals were significantly attenuated by TXNIP DNAzyme (p < 0.05). Downstream markers of TXNIP activity, particularly oxidative stress, inflammasome signalling, tubulo-interstitial fibrosis and collagen deposition, were also attenuated in the tubulo-interstitium of DN rats treated with TXNIP DNAzyme. Consistent with the identified site of action of the DNAzyme, the effects of the TXNIP inhibition were limited to the tubulo-interstitial compartment. This study supports the role of TXNIP as an important mediator of progressive tubulo-interstitial fibrosis in DN, and also supports the notion of TXNIP inhibition as a potential new therapeutic target for DN.