Diabetic kidney disease (DKD) is one of the most common and devastating complications of diabetic mellitus, and its prevalence is rising worldwide. Klotho, an anti-aging protein, is kidney protective in DKD. However, its large size, prohibitive cost and structural complexity hamper its potential utility in clinics. Here we report that Klotho-derived peptide 6 (KP6) mimics Klotho function and ameliorates DKD. In either an accelerated model of DKD induced by streptozotocin and advanced oxidation protein products in unilateral nephrectomized mice or db/db mice genetically prone to diabetes, chronic infusion of KP6 reversed established proteinuria, attenuated glomerular hypertrophy, mitigated podocyte damage, and ameliorated glomerulosclerosis and interstitial fibrotic lesions, but did not affect serum phosphorus and calcium levels. KP6 inhibited β-catenin activation in vivo and blocked the expression of its downstream target genes in glomerular podocytes and tubular epithelial cells. In vitro, KP6 prevented podocyte injury and inhibited β-catenin activation induced by high glucose without affecting Wnt expression. Co-immunoprecipitation revealed that KP6 bound to Wnt ligands and disrupted the engagement of Wnts with low density lipoprotein receptor-related protein 6, thereby interrupting Wnt/β-catenin signaling. Mutated KP6 with a scrambled amino acid sequence failed to bind Wnts and did not alleviate DKD in db/db mice. Thus, our studies identified KP6 as a novel Klotho-derived peptide that ameliorated DKD by blocking Wnt/β-catenin. Hence, our findings also suggest a new therapeutic strategy for the treatment of patients with DKD.