Alteration in renin‐angiotensin system (RAS) has been implicated in the pathophysiology of diabetic kidney disease (DKD). The deleterious actions of angiotensin II (Ang II) could be antagonized by the formation of Ang‐(1–7), generated by the actions of angiotensin‐converting enzyme 2 (ACE2) and neprilysin (NEP). NEP degrades several peptides, including natriuretic peptides, bradykinin, amyloid beta, and Ang I. Although combination of Ang II receptor and NEP inhibitor treatment benefits patients with heart failure, the role of NEP in renal pathophysiology is a matter of active research. NEP pathway is a potent enzyme in Ang I to Ang‐(1–7) conversion in the kidney of ACE2‐deficient mice, suggesting a renoprotective role of NEP. The aim of the study is to test the hypothesis that chronic hyperglycemia downregulates renal NEP protein expression and activity in db /db diabetic mice and treatment with rosiglitazone normalizes hyperglycemia, renal NEP expression, and attenuates albuminuria. Mice received rosiglitazone (20 mg kg−1 day−1) for 10 weeks. Western blot analysis, immunohistochemistry, and enzyme activity revealed a significant decrease in renal and urinary NEP expression and activity in 16‐wk db /db mice compared with lean control (p < .0001). Rosiglitazone also attenuated albuminuria and increased renal and urinary NEP expressions (p < .0001). In conclusion, data support the hypothesis that diabetes decreases intrarenal NEP, which could have a pivotal role in the pathogenesis of DKD. Urinary NEP may be used as an index of intrarenal NEP status. The renoprotective effects of rosiglitazone could be mediated by upregulation of renal NEP expression and activity in db /db diabetic mice.