Autophagosome biogenesis is an essential feature of autophagy. Lipidation of Atg8 plays a critical role in this process. Previous in vitro studies identified membrane tethering and hemi-fusion/fusion activities of Atg8, yet definitive roles in autophagosome biogenesis remained controversial. Here, we studied the effect of Atg8 lipidation on membrane structure. Lipidation of Saccharomyces cerevisiae Atg8 on nonspherical giant vesicles induced dramatic vesicle deformation into a sphere with an out-bud. Solution NMR spectroscopy of Atg8 lipidated on nanodiscs identified two aromatic membrane-facing residues that mediate membrane-area expansion and fragmentation of giant vesicles in vitro. These residues also contribute to the in vivo maintenance of fragmented vacuolar morphology under stress in fission yeast, a moonlighting function of Atg8. Furthermore, these aromatic residues are crucial for the formation of a sufficient number of autophagosomes and regulate autophagosome size. Together, these data demonstrate that Atg8 can cause membrane perturbations that underlie efficient autophagosome biogenesis.