The crosstalk between sodium-glucose cotransporter 2 (SGLT2) inhibition and a membrane-associated endocytic receptor megalin function involved in renal proximal tubular protein overload in progressive diabetic nephropathy (DN) is uncertain. Here, we determined whether SGLT2 inhibition affects megalin endocytic function through suppressing its O-linked β-N-acetylglucosamine modification (O-GlcNAcylation) and protects the diabetic kidney from protein overload. We treated 8-week-old male non-obese and hypoinsulinemic KK/Ta-Ins2Akita (KK/Ta-Akita) mice which develop progressive DN with an SGLT2 inhibitor ipragliflozin or insulin for 6 weeks, and investigated the endocytic function (proximal tubular protein reabsorption), renal expression and O-GlcNAcylation of megalin along with their effects on renal phenotypes including histology and biochemical markers. The treatment with ipragliflozin, but not insulin, suppressed megalin O-GlcNAcylation and accelerated its internalization, resulting in reduction in proximal tubular reabsorption of the highly filtered plasma proteins such as albumin and neutrophil gelatinase-associated lipocalin. These alterations following the ipragliflozin treatment contributed to amelioration of proximal tubular protein overload, mitochondrial morphological abnormality, and renal oxidative stress and tubulointerstitial fibrosis. The present study provides a novel crosstalk mechanism between SGLT2 inhibition and megalin underlying the potential renal benefits of SGLT2 inhibition in DN. •SGLT2 inhibition suppresses renal proximal tubule megalin O-GlcNAcylation.•Diminished O-GlcNAcylation promotes proximal tubule megalin internalization.•Proximal tubule megalin internalization reduces its endocytic function.•Reduced megalin endocytic function ameliorates renal protein overload in diabetes.•Amelioration of protein overload attenuates proximal tubule mitochondrial injury.