The SGLT2 inhibitor canagliflozin (CANA) slows progression of kidney function decline in type 2 diabetes. In this translational study, we determined in silico potential mechanisms of action (MoA) and identified representative candidate biomarkers to assess in vivo how CANA may delay progression of diabetic kidney disease (DKD). These biomarkers were then validated in a CANA clinical trial. A CANA MoA network model was constructed based on an in vitro transcriptomics experiment in human proximal tubular cells and molecular features linked to SGLT2 inhibitors from scientific literature. This model was mapped onto an established DKD network model that describes molecular processes of disease progression. Overlapping areas in both networks were subsequently used to select candidate biomarkers that change with CANA therapy and may be used to monitor CANA response. These biomarkers were measured in 296 plasma samples of the 2-year CANTATA-SU clinical trial comparing CANA with glimepiride. Forty-four proteins present in the CANA MoA molecular model overlapped with proteins in the DKD network model. These proteins were considered candidates serving as proxy for monitoring impact of CANA on DKD pathophysiology. For ten of these, scientific evidence was available suggesting that they are involved in DKD progression. Of these, CANA 300 mg decreased plasma levels of tumor necrosis factor receptor 1 (TNFR-1; 9.2%, p<0.01), interleukin 6 (IL6; 26.6%, p=0.01), matrix metalloproteinase 7 (MMP7; 24.9%, p=0.01), and fibronectin 1 (FN1; 14.9%, p=0.02) during two years follow-up. Changes in TNFR-1 at 1 year independently associated with eGFR decline over 2 years (p=0.0234). This study successfully applied a network-based systems biology analysis to select biomarkers for monitoring kidney response to CANA. CANA significantly reduced plasma levels of TNFR-1, IL6, MMP7, and FN1 suggesting CANA reverses molecular processes related to inflammation, extracellular matrix and fibrosis. Disclosure H.L. Heerspink: Consultant; Self; AbbVie Inc., AstraZeneca. Advisory Panel; Self; Boehringer Ingelheim GmbH. Consultant; Self; Janssen Research & Development, Fresenius SE & Co. KGaA. Advisory Panel; Self; Merck & Co., Inc.. Consultant; Self; Mitsubishi Tanabe Pharma Corporation. P. Perco: None. J. Leierer: None. M.K. Hansen: Employee; Self; Janssen Research & Development. A. Heinzel: None. G. Mayer: None.