Deposition of amyloid β peptides (Aβs) in extracellular amyloid plaques within the human brain is a hallmark of Alzheimer's disease (AD). Aβ derives from proteolytic processing of the amyloid precursor protein (APP) by β- and γ-secretases. The initial cleavage by β-secretase results in shedding of the APP ectodomain and generation of APP C-terminal fragments (APP-CTFs), which can then be further processed within the transmembrane domain by γ-secretase, resulting in release of Aβ. Here, we demonstrate that accumulation of sphingolipids (SLs), as occurs in lysosomal lipid storage disorders (LSDs), decreases the lysosome-dependent degradation of APP-CTFs and stimulates γ-secretase activity. Together, this results in increased generation of both intracellular and secreted Aβ. Notably, primary fibroblasts from patients with different SL storage diseases show strong accumulation of potentially amyloidogenic APP-CTFs. By using biochemical, cell biological, and genetic approaches, we demonstrate that SL accumulation affects autophagic flux and impairs the clearance of APP-CTFs. Thus, accumulation of SLs might not only underlie the pathogenesis of LSDs, but also trigger increased generation of Aβ and contribute to neurodegeneration in sporadic AD.