It is well known that the mutation of TRP-ML1 (transient receptor potential-mucolipin-1) causes mucolipidosis IV, a lysosomal storage disease. Given that lysosomal nicotinic acid adenine dinucleotide phosphate (NAADP)-Ca2+ release channel activity is associated with TRP-ML1, the present study was designed to test the hypothesis that NAADP regulates lysosome function via activation of TRP-ML1 channel activity. Using lysosomal preparations from wild-type (TRP-ML1+/+) human fibroblasts, channel reconstitution experiments demonstrated that NAADP (0.01–1.0 μM) produced a concentration-dependent increase in TRP-ML1 channel activity. This NAADP-induced activation of TRP-ML1 channels could not be observed in lysosomes from TRP-ML1−/− cells, but was restored by introducing a TRP-ML1 transgene into these cells. Microscopic Ca2+ fluorescence imaging showed that NAADP significantly increased intracellular Ca2+ concentration to 302.4 ± 74.28 nM (vs. 180 ± 44.13 nM of the basal) in TRP-ML1+/+ cells, but it had no effect in TRP-ML1−/− cells. If a TRP-ML1 gene was transfected into TRP-ML1−/− cells, the Ca2+ response to NAADP was restored to the level comparable to TRP-ML1+/+ cells. Functionally, confocal microscopy revealed that NAADP significantly enhanced the dynamic interaction of endosomes and lysosomes and the lipid delivery to lysosomes in TRP-ML1+/+ cells. This functional action of NAADP was abolished in TRP-ML1−/− cells, but restored after TRP-ML1 gene was rescued in these cells. Our results suggest that NAADP increases lysosomal TRP-ML1 channel activity to release Ca2+, which promotes the interaction of endosomes and lysosomes and thereby regulates lipid transport to lysosomes. Failure of NAADP-TRP-ML1 signaling may be one of the important mechanisms resulting in intracellular lipid trafficking disorder and consequent mucolipidosis.