Recent studies have demonstrated the therapeutic potential of Astragalus membranaceus in diabetic kidney disease (DKD); however, the underlying mechanisms remain incompletely elucidated. In this study, we established a streptozotocin-induced DKD mouse model to evaluate the effects of A. membranaceus extract (AME) on glycemic control, renal function, gut microbiota composition, and metabolic profiles. Biochemical analyzes revealed that A. membranaceus significantly attenuated hyperglycemia and improved renal function, as indicated by reduced serum creatinine and blood urea nitrogen levels. Metagenomic sequencing demonstrated that A. membranaceus reversed microbial dysbiosis by suppressing pathogenic bacteria (e.g., Aerococcus urinaeequi) and enriching beneficial probiotics (e.g., Thomasclavelia cocleata). Furthermore, LC/MS-based metabolomics identified key metabolic pathways, including glycerophospholipid metabolism and bile acid synthesis, as potential mediators of the therapeutic effects. These findings underscore the crucial role of the gut-renal axis in DKD pathogenesis and provide a mechanistic basis for the clinical application of A. membranaceus.