Diabetic nephropathy (DN), a prevalent and severe microvascular complication of diabetes, often leads to end‑stage renal disease and poses a threat to patient survival. However, to the best of our knowledge, there are currently no effective strategies available for the treatment of DN. Obacunone (OB), a small‑molecule natural compound derived from Citrus plants, exhibits various pharmacological effects; however, the impact of OB on DN remains to be fully elucidated. Therefore, the present study aimed to explore the effects and potential mechanisms of OB in DN. In the current study, DN models were created in vitro by treating HK‑2 cells with high‑glucose (HG) levels, and in vivo by administering a HG and high‑fat diet along with intraperitoneal injections of streptozotocin to Sprague‑Dawley rats. Subsequently, cell viability was evaluated using the Cell Counting Kit‑8 assay, while ferroptosis‑related marker levels were determined using biochemical kits, immunofluorescence and western blotting. Activation and homeostasis of the nuclear factor erythroid 2‑related factor 2 (Nrf2) signaling pathway were analyzed using western blotting, co‑immunoprecipitation and reverse transcription‑quantitative PCR. In addition, alterations in renal function parameters and the severity of renal pathological injury in rats were examined. The in vitro experiments demonstrated that OB significantly promoted cell viability and inhibited ferroptosis, as evidenced by increased glutathione peroxidase 4 and SLC7A11 expression, and decreased levels of malondialdehyde, ferrous ion and reactive oxygen species (P<0.05). Additionally, OB activated the Nrf2 signaling pathway, blocked the interaction between Nrf2 and Kelch‑like ECH‑associated protein 1, and suppressed Nrf2 ubiquitination and degradation (P<0.05). In vivo, OB administration improved renal function parameters, including serum creatinine and blood urea nitrogen levels (P<0.05), and reduced renal pathological injury, in comparison with the DN group. The results of the present study indicated that OB, a natural small molecule, exhibited significant anti‑DN effects, possibly through the regulation of Nrf2 homeostasis to inhibit ferroptosis. Overall, this study provides new evidence for OB as a potential clinical treatment for DN.