Multilamellar bodies (MLBs) are responsible for surfactant secretion in type II alveolar cells but also accumulate in other cell types under pathological conditions, including cancer and lysosomal storage diseases such as Niemann-Pick C (NPC), a congenital disease where defective cholesterol transport leads to its accumulation in lysosomes. Mv1Lu type II alveolar cells transfected with Golgi β1,6 N-acetylglucosaminyltransferase V (Mgat5), enhancing the polylactosamine content of complex-type N-glycans, exhibit stable expression of MLBs whose formation requires lysosomal proteolysis within dense autophagic vacuoles. MLBs of Mgat5-transfected Mv1Lu cells are rich in phospholipids and have low levels of cholesterol. In Mv1Lu cells treated with the NPC-mimicking drug U18666A, cholesterol-rich MLBs accumulate independently of both Mgat5 expression and lysosomal proteolysis. Inhibition of autophagy by blocking the PI 3-kinase pathway with 3-methyladenine prevents MLB formation and results in the accumulation of non-lamellar, acidic lysosomal vacuoles. Treatment with 3-methyladenine inhibited the accumulation of monodansylcadaverine, a phospholipid-specific marker for autophagic vacuoles, but did not block endocytic access to the lysosomal vacuoles. Induction of autophagy via serum starvation resulted in an increased size of cholesterol-rich MLBs. Although expression of MLBs in the Mv1Lu cell line can be induced by modulating lysosomal cholesterol or protein glycosylation, an autophagic contribution of phospholipids is critical for the formation of concentric membrane lamellae within late lysosomal organelles.