Objective: To investigate the mechanism by which advanced glycation end products (AGEs) promote diabetic kidney disease fibrosis by regulating the tyrosine phosphatase SHP1/SHP2 balance and activating the epidermal growth factor receptor (EGFR) pathway. Methods: Animal experiments and in vitro cell experiments were conducted using Western blot analysis and tissue cell staining to detect the expression of relevant proteins and cellular morphological changes. Results: AGEs disrupt the SHP1/SHP2 balance, activate the EGFR and TGFβ pathways, and promote fibrosis in diabetic nephropathy. Conclusion: AGEs regulate the balance of tyrosine phosphatases SHP1/SHP2, activate the EGFR-mediated signaling pathway, promote the release of inflammatory factors, and ultimately lead to fibrosis in diabetic nephropathy through a novel mechanism.