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.