Increased urinary albumin excretion is not simply an aftermath of glomerular injury, but is also involved in the progression of diabetic nephropathy (DN). Whereas Toll-like receptors (TLRs) are incriminated in the renal inflammation of DN, whether and how albumin is involved in the TLR-related renal inflammatory response remains to be clarified. Here, we showed that both TLR2 and TLR4, one of their putative endogenous ligands [heat shock protein 70 (HSP70)] and nuclear factor-κB promoter activity were markedly elevated in the kidneys of diabetic mice. A deficiency of TLR4 but not of TLR2 alleviated albuminuria, tubulointerstitial fibrosis and inflammation induced by diabetes. The protection against renal injury in diabetic Tlr4^−/− mice was associated with reduced tubular injuries and preserved cubilin levels, rather than amelioration of glomerular lesions. In vitro studies revealed that albumin, a stronger inducer than high glucose (HG), induced the release of HSP70 from proximal tubular cells. HSP70 blockade ameliorated albumin-induced inflammatory mediators. HSP70 triggered the production of inflammatory mediators in a TLR4-dependent manner. Moreover, HSP70 inhibition in vivo ameliorated diabetes-induced albuminuria, inflammatory response and tubular injury. Finally, we found that individuals with DN had higher levels of TLR4 and HSP70 in the dilated tubules than non-diabetic controls. Thus, activation of the HSP70-TLR4 axis, stimulated at least in part by albumin, in the tubular cell is a newly identified mechanism associated with induction of tubulointerstitial inflammation and aggravation of pre-existing microalbuminuria in the progression of DN.