Diabetic nephropathy is the UK’s leading cause of end-stage renal failure. Levels of Vascular Endothelial Growth Factor (VEGF), produced by podocytes and required for normal glomerular function, are frequently abnormal in diabetic nephropathy. Multiple splice variants of VEGF, including the traditional “VEGF165” and opposing “VEGF165b” forms, exist in the kidney. VEGF165 overexpression accelerates diabetic nephropathy. We therefore investigated whether VEGF165b reduces albuminuria in rodent diabetic nephropathy models and modifies glomerular permeability in human kidneys. C57Bl/6 mice overexpressing human VEGF165b in podocytes (nephrin promoter: nephVEGF165b), or wild-type littermates (WT), were rendered diabetic with 100mg/kg Streptozocin (STZ) i.p. daily for 3 days. As compared with diabetic-WT mice, diabetic nephVEGF165b mice had less albuminuria (68% reduction). Diabetes was also induced in DBA2J mice with 5 days of STZ (50mg/kg i.p.). After 2 weeks of hyperglycemia (>20mmol/L), mice received saline or 1μg VEGF165b injections i.p. bi-weekly for 6 weeks. Albumin-creatinine ratio (ACR) increased to 4.6-fold above baseline at 6 weeks in the sham-treated group, but only to 1.2-fold in the VEGF165b-treated group. In db/db mice, bi-weekly intraperitoneal injections of VEGF165b for 8 weeks decreased albuminuria (p<0.05, two-way ANOVA), but did not alter GFR (p>0.05, one-way ANOVA). In diabetic mice, substantial upregulation of total and phosphorylated forms of VEGF receptor 2 (VEGFR2) (both 5.1-fold increase) was noted in glomeruli in response to systemic injections of VEGF165b. To test whether diabetic glomerular function can be improved through direct modulation of the capillary wall, single glomeruli were isolated from untransplantable kidneys from diabetic and non-diabetic donors and corrected ultrafiltration coefficient (LpA/Vi, min-1.mmHg-1) was measured. LpA/Vi of human glomeruli from diabetic donors {2.3±0.4 (16/3)} was higher than LpA/Vi from non-diabetic donors {1.0±0.1 (25/3)} (p<0.001, unpaired t-test). Treatment with 1nM VEGF165b (1hr) restored LpA/Vi to normal in diabetic human glomeruli {1.0±0.2 (13/3)} (p<0.001, one-way ANOVA). VEGF165b appears to modify LpA/Vi of diabetic glomeruli via activation of VEGFR2, since the actions of VEGF165b on STZ-diabetic rat glomeruli were prevented by the VEGFR2-blocker ZM323881 (diabetes: 1.4±0.1; diabetes+VEGF165b: 0.8±0.1*; diabetes+VEGF165b+ZM323881: 1.3±0.2; *p<0.05, one-way ANOVA}. We have demonstrated that increasing VEGF165b levels locally (through podocyte-specific overexpression) and systemically (via repeated intraperitoneal injections), in both type 1 and type 2 diabetes, effectively reduces the functional features of early diabetic nephropathy and VEGF165b effect is through activation of VEGFR2. Our study suggests the potential of using VEGF165b as a therapeutic agent to slow the progression of diabetic nephropathy.