Podocyte damage and renal inflammation are the main features and pathogenesis of diabetic nephropathy (DN). Inhibition of lysophosphatidic acid (LPA) receptor 1 (LPAR1) suppresses glomerular inflammation and improves DN. Herein, we investigated LPA-induced podocyte damage and its underlying mechanisms in DN. We investigated the effects of AM095, a specific LPAR1 inhibitor, on podocytes from streptozotocin (STZ)-induced diabetic mice. E11 cells were treated with LPA in the presence or absence of AM095, and the expression of NLRP3 inflammasome factors and pyroptosis were measured. A chromatin immunoprecipitation assay and Western blotting were performed to elucidate underlying molecular mechanisms. Gene knockdown by transfecting small interfering RNA was used to determine the role of the transcription factor Egr1 (early growth response protein 1) and histone methyltransferase EzH2 (Enhancer of Zeste Homolog 2) in LPA-induced podocyte injury. AM095 administration inhibited podocyte loss, NLRP3 inflammasome factor expression, and cell death in STZ-induced diabetic mice. In E11 cells, LPA increased NLRP3 inflammasome activation and pyroptosis via LPAR1. Egr1 mediated NLRP3 inflammasome activation and pyroptosis in LPA-treated E11 cells. LPA decreased H3K27me3 enrichment at the Egr1 promoter in E11 cells by downregulating EzH2 expression. EzH2 knockdown further increased LPA-induced Egr1 expression. In podocytes from STZ-induced diabetic mice, AM095 suppressed Egr1 expression increase and EzH2/H3K27me3 expression reduction. Collectively, these results demonstrate that LPA induces NLRP3 inflammasome activation by downregulating EzH2/H3K27me3 and upregulating Egr1 expression, resulting in podocyte damage and pyroptosis, which may be a potential mechanism of DN progression.