Diabetic bladder dysfunction (DBD) is common and affects 80% of diabetic patients. However, the molecular mechanisms underlying DBD remain elusive because of a lack of appropriate animal models. We demonstrate DBD in a mouse model that harbors hepatic-specific insulin receptor substrate 1 and 2 deletions (double knockout [DKO]), which develops type 2 diabetes. Bladders of DKO animals exhibited detrusor overactivity at an early stage: increased frequency of nonvoiding contractions during bladder filling, decreased voided volume, and dispersed urine spot patterns. In contrast, older animals with diabetes exhibited detrusor hypoactivity, findings consistent with clinical features of diabetes in humans. The tumor necrosis factor (TNF) superfamily genes were upregulated in DKO bladders. In particular, TNF-α was upregulated in serum and in bladder smooth muscle tissue. TNF-α augmented the contraction of primary cultured bladder smooth muscle cells through upregulating Rho kinase activity and phosphorylating myosin light chain. Systemic treatment of DKO animals with soluble TNF receptor 1 (TNFRI) prevented upregulation of Rho A signaling and reversed the bladder dysfunction, without affecting hyperglycemia. TNFRI combined with the antidiabetic agent, metformin, improved DBD beyond that achieved with metformin alone, suggesting that therapies targeting TNF-α may have utility in reversing the secondary urologic complications of type 2 diabetes