The process of macroautophagy (herein referred to as autophagy) involves the formation of a closed double-membrane structure, called the autophagosome, and its subsequent fusion with lysosomes to form an autolysosome. Lysosomes are regenerated from autolysosomes after degradation of the sequestrated materials. In this study, we showed that mutations in cup-5, encoding the C. elegans Mucolipin 1 homolog, cause defects in the autophagy pathway. In cup-5 mutants, a variety of autophagy substrates accumulate in enlarged vacuoles that display characteristics of late endosomes and lysosomes, indicating defective proteolytic degradation in autolysosomes. We further revealed that lysosomes in coelomocytes (scavenger cells located in the body cavity) are smaller in size and more numerous in mutants with loss of autophagy activity. Furthermore, the enlarged vacuole accumulation abnormality and embryonic lethality of cup-5 mutants are partially suppressed by reduced autophagy activity. Our results indicate that the basal constitutive level of autophagy activity regulates the size and number of lysosomes and provides insights into the molecular mechanisms underlying mucolipidosis type IV disease.