Excessive fat intake contributes to the progression of metabolic diseases via cellular injury and inflammation, a process termed lipotoxicity. Here, we investigated the role of lysosomal dysfunction and impaired autophagic flux in the pathogenesis of lipotoxicity in the kidney. In mice, a high-fat diet (HFD) resulted in an accumulation of phospholipids in enlarged lysosomes within kidney proximal tubular cells (PTCs). In isolated PTCs treated with palmitic acid, autophagic degradation activity progressively stagnated in association with impaired lysosomal acidification and excessive lipid accumulation. Pulse-chase experiments revealed that the accumulated lipids originated from cellular membranes. In mice with induced PTC-specific ablation of autophagy, PTCs of HFD-mice exhibited greater accumulation of ubiquitin-positive protein aggregates normally removed by autophagy than did PTCs of mice fed a normal diet. Furthermore, HFD-mice had no capacity to augment autophagic activity upon another pathologic stress. Autophagy ablation also exaggerated HFD-induced mitochondrial dysfunction and inflammasome activation. Moreover, renal ischemia-reperfusion induced greater injury in HFD-mice than in mice fed a normal diet, and ablation of autophagy further exacerbated this effect. Finally, we detected similarly enhanced phospholipid accumulation in enlarged lysosomes and impaired autophagic flux in the kidneys of obese patients compared with nonobese patients. These findings provide key insights regarding the pathophysiology of lipotoxicity in the kidney and clues to a novel treatment for obesity-related kidney diseases.