Diabetic nephropathy (DN) is a chronic inflammatory disease that is accompanied by different degrees of lipid disorders. The present study was conducted to determine whether inflammatory stress exacerbates lipid accumulation in podocytes and to investigate its underlying mechanisms in DN using in vitro and in vivo studies. We used IL-1β stimulation in podocytes in vitro and casein injections in db/db mice in vivo to induce inflammatory stress. The plasma levels of serum inflammatory cytokines were determined using an enzyme-linked immunosorbent assay. The renal pathology was evaluated using pathological staining and electron microscopy. Intracellular lipid accumulation was evaluated by Oil Red O staining and a cholesterol quantitative assay. The gene and protein expression levels of extracellular matrix proteins, biomarkers of podocyte injury, and molecules involved in the LDLr pathway were evaluated using immunofluorescence staining, real-time PCR, and western blot analysis. Increased plasma levels of inflammatory cytokines in the casein-injected db/db mice indicated a successful induction of the inflamed DN model. The kidney morphological changes, podocyte injury, and epithelial mesenchymal transition (EMT) were more significant in casein-injected db/db mice. Moreover, inflammation increased the lipid droplet accumulation in the kidneys of db/db mice, which resulted from the increased protein expression levels of LDLr, sterol regulatory element-binding protein (SREBP) cleavage-activating protein (SCAP), and SREBP-2 in the kidneys of db/db mice. The in vitro studies further demonstrated that inflammation increased the lipid accumulation in the podocytes and induced podocyte EMT, which were correlated with inflammation-mediated increases in the expression levels of LDLr, SCAP, and SREBP-2, and increased translocation of the SCAP/SREBP-2 complex from the endoplasmic reticulum to the Golgi in the podocytes. Inflammation induced lipid accumulation and the EMT of podocytes through the dysregulation of the LDLr pathway, which contributed to podocyte injury and accelerated the progression of DN.