Podocyte dysfunction plays an essential role in the pathogenesis of proteinuria and glomerulosclerosis. However, the mechanism underlying podocyte dysfunction in many common forms of chronic kidney diseases remains poorly understood. Here we tested the hypothesis that podocytes may undergo epithelial-to-mesenchymal transition after injury. Conditionally immortalized mouse podocytes were incubated with transforming growth factor (TGF)-beta1, a potent fibrogenic cytokine that is up-regulated in the diseased kidney. TGF-beta1 suppressed the slit diaphragm-associated protein P-cadherin, zonula occludens-1, and nephrin, a change consistent with loss of the epithelial feature. Meanwhile, TGF-beta1 induced the expression of the intermediate filament protein desmin and interstitial matrix components fibronectin and collagen I. Furthermore, TGF-beta1 promoted the expression and secretion of matrix metalloproteinase-9 by podocytes. Functionally, TGF-beta1 increased albumin permeability across podocyte monolayers, as demonstrated by a paracellular albumin influx assay. The expression of Snail, a key transcriptional factor that has been implicated in initiating epithelial-to-mesenchymal transition, was induced by TGF-beta1, and ectopic expression of Snail suppressed P-cadherin and nephrin in podocytes. In vivo, in addition to loss of nephrin and zonula occludens-1, mesenchymal markers such as desmin, fibroblast-specific protein-1, and matrix metalloproteinase-9 could be observed in glomerular podocytes of diabetic nephropathy. These results suggest that podocyte dedifferentiation and mesenchymal transition could be a potential pathway leading to their dysfunction, thereby playing a role in the genesis of proteinuria.