The etiology of diabetic kidney disease (DKD) is multifaceted, with hyperglycemia, inflammation, oxidative stress, and fibrosis recognized as key contributors to renal damage in individuals with DKD. Clinical evidence suggests that dapagliflozin not only reduces blood glucose levels but also demonstrates superior efficacy in ameliorating pancreatic islet cell injury while preserving cardiac and renal function. However, the precise underlying mechanism has been poorly elucidated in the current literature. In this study, a DKD rat model was established by administering a single intraperitoneal injection of streptozotocin (STZ) to investigate the renoprotective properties of dapagliflozin and its underlying mechanisms. The findings of this study indicate that dapagliflozin enhanced pancreatic islet cell function, lowered blood glucose levels, and significantly reduced biochemical markers and renal pathological damage in DKD rats. Dapagliflozin also exerted anti-inflammatory, antioxidant, and antifibrotic effects by inhibiting the activation of the p38 MAPK/NF-κB pathway, enhancing the activity of the SIRT1/Akt/GSK-3β/Nrf2/HO-1 signaling pathway, and inhibiting the over-activation of the TGF-β1/Smad2/3 signaling pathway. These effects led to a reduction in renal injury and improved renal function in DKD rats.