Abstract: Diabetes mellitus is a serious health problem in the world and about 20 to 40% of the patients are being affected with diabetic nephropathy. The anti diabetic property of Lactobacillus reuteri (L. reuteri) has been reported. The study designed to investigate the effect of L. reuteri on the expression of BMP-7 and TGF-β genes, the two basic factors involved in diabetic nephropathy. This experimental study was carried out in two months. For this goal thirty male Wistar rats with 12 weeks old and 200±50 g weight was divided into 5 groups, each consisting six rats. (1) Non diabetic, (2) Untreated diabetic, (3) Diabetic rats fed with L. reuteri, (4) Diabetic rats treated with insulin (4-5 U/kg/day), (5) Non diabetic rat fed with L. reuteri. Diabetes in the was induced single intraperitoneal (i.p.) injection of streptozotocin (50 mg kg-1 b. wt). The L. reuteri 1x108 Colony Forming Units (CFU) were administered via oral gavages. After two months rats were anesthetized and blood samples collected. Serum nitric oxide (NO) levels were determined by a chemiluminescence method using NO analyzer and serum glucose by glucose oxidize method. The expression of BMP-7 and TGF-β genes in the rat’s kidneys were determined by real time PCR. Results showed that BMP-7 gene expression was increased in diabetic rats that fed with L. reuteri, while TGF-β gene expressions were decreased. Histopathological study showed that administration of L. reuteri (1x108 CFU/rat/day) significantly reduced kidney fibrosis and increased meaningfully NO levels in diabetic rats fed with L. reuteri. It was concluded that L. reuteri increase BMP-7 gene expression and may prevents from renal damage by oxidative stress by increasing antioxidant capacity.