Induced in high glucose-1 (IHG-1) is an evolutionarily conserved gene transcript upregulated by high extracellular glucose concentrations, but its function is unknown. Here, it is reported that the abundance of IHG-1 mRNA is nearly 10-fold higher in microdissected, tubule-rich renal biopsies from patients with diabetic nephropathy compared with control subjects. In the diabetic nephropathy specimens, in situ hybridization localized IHG-1 to tubular epithelial cells along with TGF-beta1 and activated Smad3, suggesting a possible role in the development of tubulointerstitial fibrosis. Supporting this possibility, IHG-1 mRNA and protein expression also increased with unilateral ureteral obstruction. In the HK-2 proximal tubule cell line, overexpression of IHG-1 increased TGF-beta1-stimulated expression of connective tissue growth factor and fibronectin. IHG-1 was found to amplify TGF-beta1-mediated transcriptional activity by increasing and prolonging phosphorylation of Smad3. Conversely, inhibition of endogenous IHG-1 with small interference RNA suppressed transcriptional responses to TGF-beta1. In summary, IHG-1, which increases in diabetic nephropathy, may enhance the actions of TGF-beta1 and contribute to the development of tubulointerstitial fibrosis.