Cerium oxide nanoparticles (nanoceria) are widely used in a variety of industrial applications including UV filters and catalysts. The expanding commercial scale production and use of ceria nanoparticles have inevitably increased the risk of release of nanoceria into the environment as well as the risk of human exposure. The use of nanoceria in biomedical applications is also being currently investigated because of its recently characterized antioxidative properties. In this study, we investigated the impact of ceria nanoparticles on the lysosome-autophagy system, the main catabolic pathway that is activated in mammalian cells upon internalization of exogenous material. We tested a battery of ceria nanoparticles functionalized with different types of biocompatible coatings (N-acetylglucosamine, polyethylene glycol and polyvinylpyrrolidone) expected to have minimal effect on lysosomal integrity and function. We found that ceria nanoparticles promote activation of the transcription factor EB, a master regulator of lysosomal function and autophagy, and induce upregulation of genes of the lysosome-autophagy system. We further show that the array of differently functionalized ceria nanoparticles tested in this study enhance autophagic clearance of proteolipid aggregates that accumulate as a result of inefficient function of the lysosome-autophagy system. This study provides a mechanistic understanding of the interaction of ceria nanoparticles with the lysosome-autophagy system and demonstrates that ceria nanoparticles are activators of autophagy and promote clearance of autophagic cargo. These results provide insights for the use of nanoceria in biomedical applications, including drug delivery. These findings will also inform the design of engineered nanoparticles with safe and precisely controlled impact on the environment and the design of nanotherapeutics for the treatment of diseases with defective autophagic function and accumulation of lysosomal storage material.