The present study aimed to investigate the role of adenylyl cyclase activator in preventing diabetic nephropathy via antioxidant activity in rats. Biochemical parameters were performed to confirm Streptozotocin induced nephropathy in rats. Male Wistar rats were used in the present study to reduce the effect of estrogen. Rats were subjected to high fat diet (HFD) for two weeks followed by low dose of Streptozotocin (STZ) [35mg/kg, i.p.] to develop experimental diabetic nephropathy in eight weeks. Two weeks treatment with low dose of Forskolin (10mg/kg) reduced the level of diabetic nephropathy markers but results observed were not significant. Whereas, Forskolin intermediate dose (20mg/kg) and high dose (30mg/kg) treated rats significantly attenuated diabetes induced elevated renal function parameters and endogenous antioxidants enzymatic activities. High dose of Forskolin was found to be more effective in attenuating the renal structural and functional abnormalities. Forskolin prevented renal structural and functional abnormalities diabetic rats. In the present study, Glibenclamide (0.6mg/kg) and Atorvastatin (0.5mg/kg) were used as standard drugs. Our results demonstrated synergistic effects, when high dose of Forskolin was co-administered with standard drugs. In conclusion, treatment with adenylyl cyclase activator, Forskolin in diabetic rats reduced the oxidative stress, improved renal functions and enhanced level of endogenous antioxidants. Forskolin prevented renal functional abnormalities due to diabetes mellitus. Forskolin has a potential to prevent diabetic nephropathy, implicating direct renoprotective action in diabetic rats.