Chronic kidney disease (CKD) represents a major health burden. Its central feature of renal fibrosis is not well understood. By exome sequencing, we identified mutations in FAN1 as a cause of karyomegalic interstitial nephritis (KIN), a disorder that serves as a model for renal fibrosis. Renal histology in KIN is indistinguishable from that of nephronophthisis, except for the presence of karyomegaly. The FAN1 protein has nuclease activity and acts in DNA interstrand cross-link (ICL) repair within the Fanconi anemia DNA damage response (DDR) pathway. We show that cells from individuals with FAN1 mutations have sensitivity to the ICL-inducing agent mitomycin C but do not exhibit chromosome breakage or cell cycle arrest after diepoxybutane treatment, unlike cells from individuals with Fanconi anemia. We complemented ICL sensitivity with wild-type FAN1 but not with cDNA having mutations found in individuals with KIN. Depletion of fan1 in zebrafish caused increased DDR, apoptosis and kidney cysts. Our findings implicate susceptibility to environmental genotoxins and inadequate DNA repair as novel mechanisms contributing to renal fibrosis and CKD.