The origin of albuminuria remains controversial owing to difficulties in quantifying the actual amount of albumin filtered by the kidney. Here we use fluorescently labeled albumin, together with the powerful technique of intravital 2-photon microscopy to show that renal albumin filtration in non-proteinuric rats is ~50 times greater than previously measured and is followed by rapid endocytosis into proximal tubule cells (PTCs). The endocytosed albumin appears to undergo transcytosis in large vesicles (500 nm in diameter), identified by immunogold staining of endogenous albumin by electron microscopy, to the basolateral membrane where the albumin is disgorged back to the peritubular blood supply. In nephrotic rats, the rate of uptake of albumin by the proximal tubule (PT) is decreased. This is consistent with reduced expression of clathrin, megalin, and vacuolar H⁺-ATPase A subunit, proteins that are critical components of the PT endocytotic machinery. These findings strongly support the paradigm-shifting concept that the glomerular filter normally leaks albumin at nephrotic levels. Albuminuria does not occur as this filtered albumin load is avidly bound and retrieved by PTCs. Dysfunction of this retrieval pathway leads to albuminuria. Thus, restoration of the defective endocytotic and processing function of PT epithelial cells might represent an effective strategy to limit urinary albumin loss, at least in some types of nephrotic syndrome.