Deficiency of the intrinsic lysosomal protein human scavenger receptor class B, member 2 (SCARB2; Limp-2 in mice) causes collapsing focal and segmental glomerular sclerosis (FSGS) and myoclonic epilepsy in humans, but patients with no apparent kidney damage have recently been described. We now demonstrate that these patients can develop tubular proteinuria. To determine the mechanism, mice deficient in Limp-2, the murine homolog of SCARB2, were studied. Most low-molecular-weight proteins filtered by the glomerulus are removed in the proximal convoluted tubule (PCT) by megalin/cubilin-dependent receptor-mediated endocytosis. Expression of megalin and cubilin was unchanged in Limp-2^−/− mice, however, and the initial uptake of injected Alexa Fluor 555-conjugated bovine serum albumin (Alexa-BSA) was similar to wild-type mice, indicating that megalin/cubilin-dependent, receptor-mediated endocytosis was unaffected. There was a defect in proteolysis of reabsorbed proteins in the Limp-2^−/− mice, demonstrated by the persistence of Alexa-BSA in the PCT compared with controls. This was associated with the failure of the lysosomal protease cathepsin B to colocalize with Alexa-BSA and endogenous retinol-binding protein in kidneys from Limp-2^−/− mice. The data suggest that tubular proteinuria in Limp-2^−/− mice is due to failure of endosomes containing reabsorbed proteins to fuse with lysosomes in the proximal tubule of the kidney. Failure of proteolysis is a novel mechanism for tubular proteinuria.