Diabetic nephropathy (DN) is a major complication of diabetes mellitus. Psoralea corylifolia L. seed (PCS) is a traditional medicine effective against various diseases. In this study, we aimed to investigate the effect of bavachin, the major active component of PCS, on DN in db/db mice. Bavachin (10 mg/kg/day) was administered orally to 12-week-old male db/db mice for 6 wk. For in vitro experiments, SV40 MES13 cells were treated with bavachin in the presence of 25 mM glucose. Food and water intake and urine mass were significantly increased in db/db mice compared to wild-type CON mice, but bavachin administration significantly reduced these increases. Urinary microalbumin, blood urea nitrogen, and creatinine clearance which were significantly increased in db/db mice, were also decreased by bavachin administration. Glomerular area and collagen deposition in the kidney were significantly decreased in db/db mice following bavachin administration. Increased renal levels of fibrotic factors, fibronectin, COL1A1, and α-SMA, were reduced following bavachin administration. Protein expressions of antioxidant enzymes, namely SOD2, catalase, and HO-1, and mitochondrial function-related factors, namely SIRT1, PGC1α, Nrf1, and mtTFA, were reduced in the kidney tissues of db/db mice compared to wild-type CON mice, and bavachin administration upregulated these protein expressions. In vitro studies also showed that bavachin decreases mitochondria ROS production, increases the expression of PGC-1α and SIRT1, and decreases the expression of α-SMA in high glucose-treated SV40 MES13 cells. Based on these results, bavachin improved DN by inhibiting oxidative stress and enhancing mitochondrial function.