Fluctuations in glucose levels in diabetic patients can result in oxidative stress, resulting in an increased risk for diabetic complications. We investigated whether antioxidation would protect the kidney from oxidative stress in diabetic rats treated with insulin and provide evidence for the efficacy of antioxidant treatment in diabetes management. Diabetes was induced by injection of Streptozotocin intraperitoneally in male Wistar rats. Diabetic rats received either insulin, both insulin and Radix Astragali (RA), RA, or no treatment. The levels of malondialdehyde (MDA), interleukin 6 (IL-6), tumor necrosis factor α (TNF-α) and activities of superoxide dismutase (SOD), glutathione peroxidase (GSH-Px) in kidney were determined. The changes of blood glucose levels and body weight were monitored. The levels of serum creatinine (Scr) were determined. The expression of PKCα was determined by western blot. NF-κB activation in kidney was assessed using EMSA. Compared to diabetic rats treated with insulin alone, the diabetic rats treated with combination of insulin and RA showed: (1) significantly lower levels of MDA, IL-6, TNF-α, and Scr (p < 0.05); (2) significantly higher SOD and GSH-Px activities (p < 0.05); (3) significantly lower NF-κB activation and lower expression levels of PKCα (p < 0.05); (4) significantly smaller kidney-to-body weight ratio (p < 0.05). RA is an effective agent in lowering oxidative stress in diabetic rats treated with insulin. Antioxidation is beneficial in reducing the risk of kidney damage due to oxidative stress in diabetic patients.