Hyperglycemia induces a wide array of signaling pathways in the kidney that lead to hypertrophy and matrix expansion, eventually culminating in progressive kidney failure. High glucose-induced reduction of the tumor suppressor protein phosphatase and tensin homolog deleted in chromosome 10 (PTEN) contributes to renal cell hypertrophy and matrix expansion. We identified microRNA-21 (miR-21) as the molecular link between high glucose and PTEN suppression. Renal cortices from OVE26 type 1 diabetic mice showed significantly elevated levels of miR-21 associated with reduced PTEN and increased fibronectin content. In renal mesangial cells, high glucose increased the expression of miR-21, which targeted the 3'-UTR of PTEN mRNA to inhibit PTEN protein expression. Overexpression of miR-21 mimicked the action of high glucose, which included a reduction in PTEN expression and a concomitant increase in Akt phosphorylation. In contrast, expression of miR-21 Sponge, to inhibit endogenous miR-21, prevented down-regulation of PTEN and phosphorylation of Akt induced by high glucose. Interestingly, high glucose-stimulated miR-21 inactivated PRAS40, a negative regulator of TORC1. Finally, miR-21 enhanced high glucose-induced TORC1 activity, resulting in renal cell hypertrophy and fibronectin expression. Thus, our results identify a previously unrecognized function of miR-21 that is the reciprocal regulation of PTEN levels and Akt/TORC1 activity that mediate critical pathologic features of diabetic kidney disease.