Increased O-linked ß-N-acetylglucosamine glycosylation (O-GlcNAcylation) is a known contributor to diabetes; however its relevance in diabetic nephropathy is poorly elucidated. Here we studied the process and enzymes of O-GlcNAcylation with a special emphasis on Akt-endothelial nitric oxide synthase (eNOS) and heat shock protein 72 (HSP72) signaling. Since tubular injury is the prominent site of diabetic nephropathy the effect of hyperglycemia was first measured in proximal tubular (HK-2) cells cultured in high glucose. The in vivo O-GlcNAcylation and protein levels of O-GlcNAc transferase (OGT), O-GlcNAcase (OGA), pAkt/Akt, peNOS/eNOS and HSP72 were assessed in streptozotocin-induced diabetic rat model. The effects of various renin-angiotensin-aldosterone system (RAAS)-inhibitors were also evaluated. In proximal tubular cells hyperglycemia-induced OGT expression led to increased O-GlcNAcylation which was followed by a compensatory increase of OGA. In parallel peNOS and pAkt levels decreased, while HSP72 increased. In diabetic rats elevated O-GlcNAcylation was accompanied by decreased OGT and OGA. RAAS-inhibitors ameliorated diabetes-induced kidney damage; prevented the elevation of O-GlcNAcylation and the decrement of pAkt, peNOS and HSP72. In conclusion hyperglycemia-induced elevation of O-GlcNAcylation contributes to the progression of DN via inhibition of Akt/eNOS phosphorylation and HSP72 induction. RAAS-blockers successfully inhibit this process suggesting a novel pathomechanism of their renoprotective action in the treatment of DN.