Transcription factor EB (TFEB) is a master transcriptional regulator playing a key role in lysosomal biogenesis, autophagy and lysosomal exocytosis. TFEB activity is inhibited following its phosphorylation by mammalian target of rapamycin complex 1 (mTORC1) on the surface of the lysosome. Phosphorylated TFEB is bound by 14-3-3 proteins, resulting in its cytoplasmic retention in an inactive state. It was suggested that the calcium-dependent phosphatase calcineurin is responsible for dephosphorylation and subsequent activation of TFEB under conditions of lysosomal stress. We have recently demonstrated that TFEB is activated following exposure of cancer cells to lysosomotropic anticancer drugs, resulting in lysosome-mediated cancer drug resistance via increased lysosomal biogenesis, lysosomal drug sequestration, and drug extrusion through lysosomal exocytosis. Herein, we studied the molecular mechanism underlying lysosomotropic-drug-induced activation of TFEB. We demonstrate that accumulation of lysosomotropic drugs results in membrane fluidization of lysosome-like liposomes, which is strictly dependent on the acidity of the liposomal lumen. Lysosomal accumulation of lysosomotropic drugs and the consequent fluidization of the lysosomal membrane, facilitated the dissociation of mTOR from the lysosomal membrane and inhibited the kinase activity of mTORC1, which is necessary and sufficient for the rapid translocation of TFEB to the nucleus. We further show that while lysosomotropic drug sequestration induces Ca2+ release into the cytoplasm, facilitating calcineurin activation, chelation of cytosolic Ca2+, or direct inhibition of calcineurin activity, do not interfere with drug-induced nuclear translocation of TFEB. We thus suggest that lysosomotropic drug-induced activation of TFEB is mediated by mTORC1 inhibition due to lysosomal membrane fluidization and not by calcineurin activation. We further postulate that apart from calcineurin, other constitutively active phosphatase(s) partake in TFEB dephosphorylation and consequent activation. Moreover, a rapid export of TFEB from the nucleus to the cytosol occurs upon relief of mTORC1 inhibition, suggesting that dephosphorylated TFEB constantly travels between the nucleus and the cytosol, acting as a rapidly responding sensor of mTORC1 activity.