Abstract Background Diabetic nephropathy is one of the most serious complications in patients with diabetes. At present, there are no satisfactory treatments available for diabetic nephropathy. Stem cells are currently the main candidates for the development of new treatments for diabetic nephropathy, as they may exert their therapeutic effects mainly through paracrine mechanisms. Exosomes derived from stem cells have been reported to play an important role in kidney injury. In this article, we try to investigate whether exosomes retrieved from urine stem cells could itself prevent diabetic nephropathy at an early stage in vivo and in vitro. Methods Exosomes from conditioned medium of urine-derived stem cells (USCs-Exo) were isolated using ultrafiltration-combined purification methods. USCs-Exo were then verified by morphology, size, and specific biomarkers using transmission electron microscopy, tunable resistive pulse sensing analysis, and western blotting. After establishment of the streptozotocin-induced Sprague–Dawley rat model, the effects of USCs-Exo on kidney injury and angiogenesis were observed via weekly tail intravenous injection of USCs-Exo or control until 12 weeks. In vitro, podocytes cultured in high-glucose medium were treated with USCs-Exo to test the protective effect of USCs-Exo on podocytic apoptosis. Meanwhile, the potential factors in promoting vascular regeneration in USCs-Exo and urine-derived stem cell conditioned medium were investigated by enzyme-linked immunosorbent assay. Results Urine-derived stem cells were cultured and were verified by positive markers for CD29, CD73, CD90 and CD44 antigens, and negative markers for CD34, CD45 and HLA-DR. USCs-Exo were approximately 50–100 nm spherical vesicles, and the specific markers included CD9, CD63 and CD81. Intravenous injections of USCs-Exo could potentially reduce the urine volume and urinary microalbumin excretion, prevent podocyte and tubular epithelial cell apoptosis, suppress the caspase-3 overexpression and increase glomerular endothelial cell proliferation in diabetic rats. In addition, USCs-Exo could reduce podocytic apoptosis induced by high glucose in vitro. USCs-Exo contained the potential factors, including growth factor, transforming growth factor-β1, angiogenin and bone morphogenetic protein-7, which may be related with vascular regeneration and cell survival. Conclusion USCs-Exo may have the potential to prevent kidney injury from diabetes by inhibiting podocyte apoptosis and promoting vascular regeneration and cell survival.