The autophagy-lysosomal pathway plays an important role in the clearance of long-lived proteins and dysfunctional organelles. Lysosomal dysfunction has been implicated in several neurodegenerative disorders including Parkinson's disease and related synucleinopathies that are characterized by accumulations of α-synuclein in Lewy bodies. Recent identification of mutations in genes linked to lysosomal function and neurodegeneration has offered a unique opportunity to directly examine the role of lysosomes in disease pathogenesis. Mutations in lysosomal membrane protein ATP13A2 (PARK9) cause familial Kufor-Rakeb syndrome characterized by early-onset parkinsonism, pyramidal degeneration and dementia. While previous data suggested a role of ATP13A2 in α-synuclein misfolding and toxicity, the mechanistic link has not been established. Here we report that loss of ATP13A2 in human fibroblasts from patients with Kufor-Rakeb syndrome or in mouse primary neurons leads to impaired lysosomal degradation capacity. This lysosomal dysfunction results in accumulation of α-synuclein and toxicity in primary cortical neurons. Importantly, silencing of endogenous α-synuclein attenuated the toxicity in ATP13A2-depleted neurons, suggesting that loss of ATP13A2 mediates neurotoxicity at least in part via the accumulation of α-synuclein. Our findings implicate lysosomal dysfunction in the pathogenesis of Kufor-Rakeb syndrome and suggest that upregulation of lysosomal function and downregulation of α-synuclein represent important therapeutic strategies for this disorder.