Although renin-angiotensin blockade has shown the beneficial outcomes in patients with diabetes, renal injury progresses in most of these patients. Therefore, there remains a need for new therapeutic targets in diabetic kidney disease. Enhancement of vasoactive peptides, such as natriuretic peptides, via neprilysin inhibition, has been a new approach. A first-in-class drug sacubitril/valsartan (Sac/Val), a combination of angiotensin II receptor blocker valsartan and neprilysin inhibitor prodrug sacubitril, has been shown more effective than renin-angiotensin blockade alone in the treatment of heart failure with reduced ejection fraction. In this study we tested the effects of Sac/Val in the diabetic kidney disease. We administered Sac/Val or valsartan to two type 2 diabetes mouse models, db/db mice or KKAy mice. After 3-month treatment, Sac/Val attenuated the progression of proteinuria, glomerulosclerosis, and podocyte loss in both models of diabetic mice. Valsartan shared the similar improvement but to a lesser degree in some parameters compared to Sac/Val. Sac/Val but not valsartan decreased the blood glucose level in KKAy mice. Sac/Val exerted renal protection through coordinated effects on anti-oxidative stress and anti-inflammation. In both diabetic models, we revealed a new mechanism to cause inflammation, self DNA activated cGAS-STING signaling, which was activated in diabetic kidneys and prevented by Sac/Val or valsartan treatment. Present data suggest that Sac/Val has sufficient therapeutical potential to counter the pathophysiological effects of diabetic kidney disease and its effectiveness could be better than valsartan alone.