The adaptor protein complex-4 or AP-4 is known to mediate autophagosome maturation through regulating sorting of transmembrane cargo such as ATG9A at the Golgi. There is a need to understand AP-4 function in neurons, as mutations in any of its four subunits cause a complex form of hereditary spastic paraplegia (HSP) with intellectual disability. While AP-4 has been implicated in regulating trafficking and distribution of cargo such as ATG9A and APP, little is known about its effect on neuronal lysosomal protein traffic, lysosome biogenesis, and function. In this study, we demonstrate that in human iPSC-derived neurons AP-4 regulates lysosome composition, function, and transport via regulating the export of critical lysosomal receptors, including Sortilin 1, from the trans-Golgi network to endo-lysosomes. Additionally, loss of AP-4 causes endo-lysosomes to stall and build up in axonal swellings potentially through reduced recruitment of retrograde transport machinery to the organelle. These findings of axonal lysosome buildup are highly reminiscent of those observed in Alzheimer's disease as well as in neurons modeling the most common form of HSP, caused by spastin mutations. Our findings implicate AP-4 as a critical regulator of neuronal lysosome biogenesis and altered lysosome function and axonal endo-lysosome transport as an underlying defect in AP-4-deficient HSP. Additionally, our results also demonstrate the utility of the human i3Neuronal model system in investigating neuronal phenotypes observed in AP-4-deficient mice and/or the human AP-4 deficiency syndrome.