Advanced glycation end products (AGEs) formation plays an important role in the progression of diabetic complications. To develop effective herbal formulations with suppression of diabetic nephropathy, a common complication in diabetic patients, we evaluated inhibitory activities of KIOM-79, a new herbal prescription, on the formation of AGEs using in vitro and in vivo model systems. Effects of KIOM-79 on the expression of AGEs, RAGEs (receptor for Advanced glycation end products), type IV collagen and renal $TGF-{eta}1$ mRNA was also examined in streptozotocon (STZ)-induced diabetic rats. STZ-induced diabetic rats were treated orally with KIOM-79 (250 and $500;kg^{-1}$ once a day for 13 weeks). In vitro system KIOM-79 suppressed the formation of AGEs $(18.12;{mu}g/ml)$. In STZ-induced diabetic rats showing accumulation of AGE and RAGE, pathological examination revealed that KIOM-79 prevented AGE and RAGE deposition in the kidney. In STZ induced diabetic rats, the expansion of mesangial matrix and the glomerular tufts seemed to be larger than those in normal rats. Howεver, after administration with KIOM-79, mesangial metrix and glomerular volume were decreased, and overexpression of type IV collagen was also decreased. Overexpression of renal $TGF-{eta}1$ mRNA was inhibited significantly. These results suggest that the KIOM-79 might be an effective herbal prescription to prevent or alleviate the progression of diabetic nephropathy.