Some patients with diabetic kidney disease (DKD) show a fast progression of kidney dysfunction and are known as a "fast decliner" (FD). Therefore, it is critical to understand pathomechanisms specific for fast decline. Here, we performed a comprehensive metabolomic analysis of patients with stage G3 DKD and identified increased urinary lysophosphatidylcholine (LPC) in fast decline. This was confirmed by quantification of urinary LPC using mass spectrometry and identified urinary LPC containing saturated fatty acids palmitic (16:0) and stearic (18:0) acids was increased in FDs. The upsurge in urinary LPC levels was correlated with a decline in estimated glomerular filtration rate after 2.5 years. To clarify a pathogenic role of LPC in FD, we studied an accelerated rat model of DKD and observed an increase in LPC (16:0) and (18:0) levels in the urine and kidney tubulointerstitium as the disease progressed. These findings suggested that local dysregulation of lipid metabolism resulted in excessive accumulation of this LPC species in the kidney. Our in vitro studies also confirmed LPC-mediated lipotoxicity in cultured proximal tubular cells. LPC induced accumulation of lipid droplets via activation of peroxisome proliferator-activated receptor-δ followed by upregulation of the lipid droplet membrane protein perilipin 2 and decreased autophagic flux, thereby inducing organelle stress and subsequent apoptosis. Thus, LPC (16:0) and (18:0) may mediate a fast progression of DKD and may serve as a target for novel therapeutic approaches.