Background Diabetic nephropathy (DN) is a microvascular complication of diabetes mellitus (DM). DN results from many factors, including changes in glomerular hemodynamics, oxidative stress and inflammation, and interstitial fibrosis and tubular atrophy. Panax notoginseng, a commonly used Chinese medicine, has been used in the treatment of kidney disease. Notoginsenoside R1 (NGR1), the main compound isolated from P. notoginseng, has been reported to have a renoprotective role in DN. However, the therapeutic effect and mechanism of NGR1 in DN remain unclear. Objective The present study aimed to investigate the therapeutic effect and mechanism of NGR1 in DN. Methods In this study, mouse podocytes (MPC-5 cells) and db/db mice were used to investigate the effect of NGR1 on DN in vitro and in vivo, respectively. Blood glucose, renal function, inflammatory factors, and PI3K/AKT-Nrf2-NLRP3 signaling pathway proteins were assessed. Results The study results indicated that NGR1 reversed cell viability induced by high glucose (HG, 30 mM). The related mechanism results showed that NGR1 decreased oxidative stress by inhibiting reactive oxygen species (ROS) level and upregulating the expression of Nrf2, NQO1, and HO-1 via TXNIP targeting. In addition, NLRP3 inflammasome and PI3K/AKT were engaged in NGR1-based protection against HG-stimulated podocytes. In db/db mice, NGR1 significantly decreased blood glucose, urine protein, urine output, blood urea nitrogen, and other parameters as well as reversed kidney injury by inhibiting oxidative stress and proinflammatory response. Conclusion Taken together, this study revealed that NGR1 exerted a significant therapeutic effect on DN both in vitro and in vivo via a mechanism related to the TXNIP-Nrf2 pathway and NLRP3 inflammasome, suggesting that NGR1 is a potential therapeutic option for DN.