Kidney podocytes and their foot processes maintain the ultrafiltration barrier and prevent urinary protein loss (proteinuria). Here we show that the GTPase dynamin is essential for podocyte function. During proteinuric kidney disease, induction of cytoplasmic cathepsin L leads to cleavage of dynamin at an evolutionary conserved site, resulting in reorganization of the podocyte actin cytoskeleton and proteinuria. Dynamin mutants that lack the cathepsin L site, or render the cathepsin L site inaccessible through dynamin self-assembly, are resistant to cathepsin L cleavage. When delivered into mice, these mutants restored podocyte function and resolve proteinuria. Our study identifies dynamin as a critical regulator of renal permselectivity that is specifically targeted by proteolysis under pathological conditions.