2-Hydroxypropyl-beta-cyclodextrin (HPbetaCD) is a Food and Drug Administration-approved excipient used to improve the stability and bioavailability of drugs. Despite its wide use as a drug delivery vehicle and the recent approval of a clinical trial to evaluate its potential for the treatment of a cholesterol storage disorder, the cellular pathways involved in the adaptive response that is activated upon exposure to HPbetaCD are still poorly defined. Here, we show that cell treatment with HPbetaCD results in the activation of the transcription factor EB, a master regulator of lysosomal function and autophagy, and in enhancement of the cellular autophagic clearance capacity. HPbetaCD administration promotes transcription factor EB-mediated clearance of proteolipid aggregates that accumulate due to inefficient activity of the lysosome-autophagy system in cells derived from a patient with a lysosomal storage disorder. Interestingly, HPbetaCD-mediated activation of autophagy was found not to be associated with activation of apoptotic pathways. This study provides a mechanistic understanding of the cellular response to HPbetaCD treatment, which will inform the development of safe HPbetaCD-based therapeutic modalities and may enable engineering HPbetaCD as a platform technology to reduce the accumulation of lysosomal storage material.