Tissue kallikrein is the main kinin-forming enzyme in mammals, and differences in kinin levels are thought to be a contributing factor to diabetic nephropathy. Here, we determined the role of the kallikrein-kinin system in the pathogenesis of streptozotocin-induced diabetic nephropathy in wild-type and tissue kallikrein-knockout mice. All diabetic mice developed similar hyperglycemia, but the knockout mice had a significant two-fold increase in albuminuria compared to the wild-type mice before and after blood pressure elevation. Ezrin mRNA, a podocyte protein potentially implicated in albuminuria, was downregulated in the kidney of knockout mice. One month after induction of diabetes, the mRNAs of kininogen, tissue kallikrein, kinin B1, and B2 receptors were all increased up to two-fold in the kidney in both genotypes. Diabetes caused a 50% decrease in renal angiotensin-converting enzyme expression and a 20-fold increase in kidney injury molecule-1 reflecting tubular dysfunction, but there was no genotype difference. Our study found an early activation of the kallikrein-kinin system in the kidney and that this has a protective role against the development of diabetic nephropathy. The effect of tissue kallikrein deficiency on microalbuminuria in diabetic mice is similar to the effect of genetically high angiotensin-converting enzyme levels, suggesting that both observations, in part, result from a deficiency in kinins.