Autophagy is a complex catabolic pathway that mediates degradation of excess or unwanted cytoplasmic components through the lysosome. Activated by environmental factors, such as nutrient depletion, and intracellular stimuli, such as proteotoxic stress, it provides a highly dynamic quality control mechanism to recycle cellular components, eliminate aberrant materials, and, ultimately, maintain cellular homeostasis. A growing body of evidence suggests that autophagy is also activated upon internalization of engineered nanomaterials, most likely as a protective response to what is perceived as foreign or toxic. This review describes the mechanisms of autophagy activation in response to naturally occurring and engineered nanomaterials. We provide a comprehensive analysis of the impact of nanomaterials on the lysosome-autophagy system, with particular emphasis on cellular markers associated with biocompatible and bioadverse outcomes of autophagy activation, such as clearance of toxic material and autophagy-associated cell death. Potential applications of the next-generation nanomaterials designed to interface with cellular clearance mechanisms with precisely tunable properties are also discussed.