Diabetic kidney disease (DKD), a common diabetes complication, often progresses to end-stage renal disease (ESRD) Lipid accumulation is crucial in DKD progression, and its dysregulation causes ectopic fat distribution, inflammation, and renal damage. Soyasapogenol C (SSC) has various therapeutic potentials. However, its effect on DKD and the underlying mechanisms are unknown. This study explores SSC's role in improving DKD, especially in db/db mice, an ideal DKD research model. We hypothesize that by modulating lipid metabolism, especially cholesterol metabolism, SSC could treat DKD. Results show SSC inhibits cholesterol accumulation, interstitial fibrosis, and renal inflammation in db/db mice. In vitro, it suppresses cholesterol accumulation in HK2 cells and increases ABCA1 and ABCG1 levels. Mechanistically, SSC upregulates ABCA1 and ABCG1 via liver X receptor α (LXRα), and this is inhibited by LXRα inhibitor or siRNA knockdown. Our findings offer new insights into SSC's role in cholesterol metabolism and lipid deposition, and new DKD treatment targets.