One of the global alarming prevalent metabolic diseases is Type 2 diabetes mellitus (T2DM) than other diabetes and sustains a substantial burden on public and healthcare systems. This study attempts to endeavor the beneficial effect of chitosan stabilized nanoparticles Ch-SeNPs on combating diabetic nephropathy (DN) after induction of T2DM in rats (DN.STZ-induced T2D). High-fat diet (HFD) and STZ were used for the induction of T2DM in rats, and then they were treated with either metformin alone (MEF) (500 mg/kg b.wt.) or combined with (Ch-SeNPs) (2 mg Se/kg b.wt.) for eight weeks. The microvascular complications in renal tissue of diabetic rats were pronounced by the prevalence of microalbuminuria and elevated levels of urea, creatinine, and BUN. Pronounced oxidative stress with enhanced inflammatory response. In the urine of diabetic rats, a marked increase in Kim 1, β2-microglobulin, and urinary albumin. Renal morphological alterations were observed in all groups upon induction of T2DM, except for the Ch-SeNPs/MEF group showed noticeable improvements. The expression levels of Aldo-keto reductase AKr1B1, profibrotic protein transforming growth factor-β1 (TGF-β1), nestin, desmin, and vimentin, were up-regulated in the diabetic group. Significant down-regulation of their expression and restored antioxidant capacity was observed in the combined-treated group than single treated ones. Ch-SeNPs helped limit the prevalence of TNF-α, IL-6, and IL-1β while used after T2DM induction by STZ and HFD. Ch-SeNPs/MEF co-therapy could effectively guard the kidneys and reduce the renal tissue injury via inhibiting oxidative stress and restoring glucose hemostasis, which indicates a promising line for treating T2DM nephropathy.