Increasing evidence shows that autophagy, particularly macroautophagy, plays a Dr. Jekyll and Mr. Hyde role in determining cell fate; autophagic activity can be protective under certain conditions, whereas it may lead to cell death under others. Niemann-Pick Type C (NPC) disease is an early onset autosomal recessive disorder characterized by accumulation of cholesterol and other lipids in late endosomes/lysosomes. About 95% of the cases are caused by mutations in the NPC1 gene, whereas the remaining 5% are due to mutations in the NPC2 gene. Severe neurodegeneration that accompanies NPC is likely the fatal cause in this disease, although the underlying mechanism remains unclear. Our study shows that autophagic activity is enhanced in Npc1-/- mice, as evidenced by increased levels of LC3-II and the number of autophagic vacuole-like structures. Interestingly, LC3 immunoreactivity co-localizes with filipin-labeled cholesterol clusters inside Purkinje cells. Furthermore, increases in autophagic activity are closely associated with alteration in lysosomal function and protein ubiquitination. In this article, these results are further discussed in the context of autophagic-lysosomal function and neuronal survival and degeneration.