Tetrahydrocurcumin (THC), a principal metabolite of curcumin, was tested in a rat model of type 2 diabetes mellitus. THC was administered via daily oral gavage with the lipid carrier polyenylphosphatidylcholine (PPC) as add-on therapy to losartan (angiotensin receptor blocker) to examine effects on kidney oxidative stress and fibrosis. A combination of unilateral nephrectomy, high-fat diet and low-dose streptozotocin was used to induce diabetic nephropathy in male Sprague-Dawley rats. Animals with fasting blood glucose >200 mg/dL were randomized to PPC, losartan, THC + PPC or THC + PPC + losartan. Untreated chronic kidney disease (CKD) animals had proteinuria, decreased creatinine clearance, and evidence of kidney fibrosis on histology. THC + PPC + losartan treatment significantly lowered blood pressure concurrent with increased messenger RNA levels of antioxidant copper-zinc-superoxide dismutase and decreased protein kinase C-α, kidney injury molecule-1 and type I collagen in the kidneys; there was decreased albuminuria and a trend for increased creatinine clearance compared to untreated CKD rats. There was decreased fibrosis on kidney histology in PPC-only and THC-treated CKD rats. Plasma levels of kidney injury molecule-1 were decreased in THC + PPC + losartan animals. In summary, add-on THC to losartan therapy improved antioxidant levels and decreased fibrosis in the kidneys, and lowered blood pressure in diabetic CKD rats.