Monosodium urate (MSU) crystallisation deposited in local tissues and organs induce inflammatory reactions, resulting in diseases such as gout. MSU has been recognized as a common and prevalent pathology in various clinical conditions. In this study, we investigated the role of MSU in the pathogenesis of diabetic kidney disease (DKD). We induced renal injury in diabetic kidney disease mice using streptozotocin (STZ) and assessed renal histopathological damage using Masson's trichrome staining and Collagen III immunofluorescence staining. We measured the levels of malondialdehyde (MDA), superoxide dismutase (SOD), and uric acid (UA) using ELISA. Protein expression levels of NLRP3, p-NF-kappa B, SHP2, p-STAT3, and p-ERK1/2 were analyzed by Western blot. To further investigate the role of MSU in diabetic kidney disease, we conducted in vitro experiments. In our in vivo experiments, we found that compared to the Model group, there was a significant increase in interstitial fibrosis in the kidneys of mice after treatment with MSU, accompanied by elevated levels of MDA, SOD, and UA. Furthermore, the protein expression of NLRP3, p-NF-NB, SHP2, p-STAT3, and p-ERK1/2 was upregulated. In our subsequent studies on mouse fibroblasts (L929 cells), we discovered that high glucose, MSU, and TGF-beta could promote the expression of P22, GP91, NLRP3, NF-kappa B, p-NF-kappa B, p-SHP2, p-EGFR, p-STAT3, and Collagen-III proteins. Additionally, we found that SHP2 could counteract the upregulation trend induced by MSU on the expression of p-SHP2, p-EGFR, p-STAT3, and Collagen-III proteins, and inhibitors YQ128, NAC, and Cetuximab exhibited similar effects. Furthermore, immunofluorescence results indicated that SHP2 could inhibit the expression of the fibrosis marker alpha-SMA in L929 cells. These findings suggest that MSU can promote renal fibroblast SHP2 expression, induce oxidative stress, activate the NLRP3/NF-kappa B pathway, and enhance diabetic kidney disease fibroblast proliferation through the TGF beta/STAT3/ERK1/2 signaling pathway, leading to renal fibrosis.