Inflammation plays a vital role in the development of diabetic nephropathy, but the underlying regulatory mechanisms are only partially understood. Our previous studies demonstrated that, during acute inflammation, endothelial heparan sulfate (HS) contributes to the adhesion and transendothelial migration of leukocytes into perivascular tissues by direct interaction with L-selectin and the presentation of bound chemokines. In the current study, we aimed to assess the role of endothelial HS on chronic renal inflammation and fibrosis in a diabetic nephropathy mouse model. To reduce sulfation of HS specifically in the endothelium, we generated Ndst1 f/f Tie2Cre + mice in which N-deacetylase/N-sulfotransferase-1 (Ndst1), the gene that initiates HS sulfation modifications in HS biosynthesis, was expressly ablated in endothelium. To induce diabetes, age-matched male Ndst1 f/f Tie2Cre - (wild type) and Ndst1 f/f Tie2Cre + mice on a C57Bl/6J background were injected intraperitoneally with streptozotocin (STZ) (50 mg/kg) on five consecutive days (N = 10-11/group). Urine and plasma were collected. Four weeks after diabetes induction the animals were sacrificed and kidneys were analyzed by immunohistochemistry and qRT-PCR. Compared to healthy controls, diabetic Ndst1 f/f Tie2Cre - mice showed increased glomerular macrophage infiltration, mannose binding lectin complement deposition and glomerulosclerosis, whereas these pathological reactions were prevented significantly in the diabetic Ndst1 f/f Tie2Cre + animals (all three p < 0.01). In addition, the expression of the podocyte damage marker desmin was significantly higher in the Ndst1 f/f Tie2Cre - group compared to the Ndst1 f/f Tie2Cre + animals (p < 0.001), although both groups had comparable numbers of podocytes. In the cortical tubulo-interstitium, similar analyses show decreased interstitial macrophage accumulation in the diabetic Ndst1 f/f Tie2Cre + animals compared to the diabetic Ndst1 f/f Tie2Cre - mice (p < 0.05). Diabetic Ndst1 f/f Tie2Cre + animals also showed reduced interstitial fibrosis as evidenced by reduced density of αSMA-positive myofibroblasts (p < 0.01), diminished collagen III deposition (p < 0.001) and reduced mRNA expression of collagen I (p < 0.001) and fibronectin (p < 0.001). Our studies indicate a pivotal role of endothelial HS in the development of renal inflammation and fibrosis in diabetic nephropathy in mice. These results suggest that HS is a possible target for therapy in diabetic nephropathy.