Oxidative stress and inflammation play important roles in diabetic complications, including diabetic nephropathy. Metallothionein (MT) is induced in proximal tubular epithelial cells as an antioxidant in the diabetic kidney; however, the role of MT in renal function remains unclear. We therefore investigated whether MT deficiency accelerates diabetic nephropathy through oxidative stress and inflammation. Diabetes was induced by streptozotocin injection in MT-deficient (MT^−/−) and MT^+/+ mice. Urinary albumin excretion, histological changes, markers for reactive oxygen species (ROS), and kidney inflammation were measured. Murine proximal tubular epithelial (mProx24) cells were used to further elucidate the role of MT under high-glucose conditions. Parameters of diabetic nephropathy and markers of ROS and inflammation were accelerated in diabetic MT^−/− mice compared with diabetic MT^+/+ mice, despite equivalent levels of hyperglycemia. MT deficiency accelerated interstitial fibrosis and macrophage infiltration into the interstitium in the diabetic kidney. Electron microscopy revealed abnormal mitochondrial morphology in proximal tubular epithelial cells in diabetic MT^−/− mice. In vitro studies demonstrated that knockdown of MT by small interfering RNA enhanced mitochondrial ROS generation and inflammation-related gene expression in mProx24 cells cultured under high-glucose conditions. The results of this study suggest that MT may play a key role in protecting the kidney against high glucose-induced ROS and subsequent inflammation in diabetic nephropathy.