Lysosomes have emerged as critical regulators of cellular homeostasis. Here we show that the lysosomal protein TMEM55B contributes to restore cellular homeostasis in response to oxidative stress by three different mechanisms: (1) TMEM55B mediates NEDD4-dependent PLEKHM1 ubiquitination, causing PLEKHM1 proteasomal degradation and halting autophagosome/lysosome fusion; (2) TMEM55B promotes recruitment of components of the ESCRT machinery to lysosomal membranes to stimulate lysosomal repair; and (3) TMEM55B sequesters the FLCN/FNIP complex to facilitate translocation of the transcription factor TFE3 to the nucleus, allowing expression of transcriptional programs that enable cellular adaptation to stress. Knockout of tmem55 genes in zebrafish embryos increases their susceptibility to oxidative stress, causing early death of tmem55-KO animals in response to arsenite toxicity. Altogether, our work identifies a role for TMEM55B as a molecular sensor that coordinates autophagosome degradation, lysosomal repair, and activation of stress responses.