Tubulointerstitial changes in the diabetic kidney correlate closely with renal fibrosis, and transforming growth factor‐beta‐1 (TGF‐β1) is thought to play a key role in this process. In contrast, hepatocyte growth factor (HGF) has shown therapeutic effects on injured renal tubules in animal models. This study was undertaken to test the hypothesis that the preventive effects of HGF may result from interventions in TGF‐β1‐mediated signaling and collagen III secretion. We examined the expression of HGF/HGF receptor (c‐Met) and TGF‐β1 in renal fibroblasts at multiple time points. The effects of recombinant human HGF on TGF‐β1 expression were studied by RT‐PCR and Western blotting, and the levels of collagen III were measured by ELISA. In the high‐glucose condition, the expression of HGF and c‐Met in renal fibroblasts was detected as early as 6 hours following cell culture while the level of TGF‐β1 peaked at 96 hours. The addition of recombinant human HGF to the culture media dose‐dependently inhibited TGF‐β1 mRNA expression and reduced collagen III secretion by 34%. These results indicate that, during hyperglycemia, HGF inhibits TGF‐β1 signaling and type III collagen activation in interstitial fibroblasts. Furthermore, we should recognize that changes in the balance between HGF and TGF‐β1 might be decisive in the pathogenesis of chronic renal fibrosis. Therefore, administration of HGF to restore this balance may offer a novel therapeutic intervention in managing renal fibrogenesis in diabetic nephropathy.