Nephrin is a core component of podocyte (glomerular epithelial cell) slit diaphragm and is required for kidney ultrafiltration. Down-regulation or mislocalization of nephrin has been observed in diabetic kidney disease (DKD), characterized by albuminuria. Here, we investigate the role of protein kinase C and casein kinase 2 substrate in neurons 2 (PACSIN2), a regulator of endocytosis and recycling, in the trafficking of nephrin and development of DKD. We observe that PACSIN2 is up-regulated and nephrin mislocalized in podocytes of obese Zucker diabetic fatty (ZDF) rats that have altered renal function. In cultured podocytes, PACSIN2 and nephrin colocalize and interact. We show that nephrin is endocytosed in PACSIN2-positive membrane regions and that PACSIN2 overexpression increases both nephrin endocytosis and recycling. We identify rabenosyn-5, which is involved in early endosome maturation and endosomal sorting, as a novel interaction partner of PACSIN2. Interestingly, rabenosyn-5 expression is increased in podocytes in obese ZDF rats, and, in vitro, its overexpression enhances the association of PACSIN2 and nephrin. We also show that palmitate, which is elevated in diabetes, enhances this association. Collectively, PACSIN2 is up-regulated and nephrin is abnormally localized in podocytes of diabetic ZDF rats. In vitro, PACSIN2 enhances nephrin turnover apparently via a mechanism involving rabenosyn-5. The data suggest that elevated PACSIN2 expression accelerates nephrin trafficking and associates with albuminuria.