Telmisartan provides renal benefit at all stages of the renal continuum in patients with type 2 diabetes mellitus. This research is to investigate the effect of telmisartan on kidney function in diabetic rats and to identify the underlying molecular mechanisms. Diabetic rats were divided into vehicle group, low dosage (TeL) group, and high dosage of telmisartan (TeH) group. We performed Illumina RatRef-12 Expression BeadChip gene array experiments. We found 3-months of treatment with telmisartan significantly decreased 24-h urinary albumin, serum creatinine, blood urea nitrogen, and increased creatinine clearance rate. Kidney hypertrophy and glomerular mesangial matrix expansion were ameliorated. The glomeruli from the TeH group had 1541 genes with significantly changed expression (554 increased, 987 decreased). DAVID (Database for annotation, visualization and Integrated discovery) analyses showed that the most enriched term was 'mitochondrion' (Gene Ontology (GO:0005739)) in all 67 GO functional categories. Kyoto Encyclopedia of Genes and Genomes (KEGG) pathway analyses indicated that all differentially expressed genes included seven KEGG pathways. Of those pathways, four are closely related to the oxidative phosphorylation pathway. Quantitative real-time PCR verified that the H+ transporting mitochondrial F1 complex, beta subunit (Atp5b), cytochrome c oxidase subunit VIc (Cox6c), and NADH dehydrogenase (ubiquinone) Fe-S protein 3 (Ndufs3) were significantly downregulated both in TeL and TeH groups, while nephrosis 1 homolog (Nphs1) and nephrosis 2 homolog (Nphs2) were significantly upregulated. The increased expression of malonaldehyde and NDUFS3 in the glomeruli of diabetic rats was attenuated by telmisartan. The other significantly changed pathway we found was the peroxisome proliferator-activated receptor (PPAR) signaling pathway. Our data suggest that telmisartan can improve kidney function in diabetic rats. The mechanism may be involved in mitochondrion oxidative phosphorylation, the PPAR-γ pathway, and the slit diaphragm.