Lysosomal exocytosis is a Ca2+-regulated mechanism that involves proteins responsible for cytoskeletal attachment and fusion of lysosomes with the plasma membrane. However, whether luminal lysosomal enzymes contribute to this process remains unknown. Here we show that neuraminidase NEU1 negatively regulates lysosomal exocytosis in hematopoietic cells by processing the sialic acids on the lysosomal membrane protein LAMP-1. In macrophages from NEU1-deficient mice, a model of the disease sialidosis, and in patients' fibroblasts, oversialylated LAMP-1 enhances lysosomal exocytosis. Silencing of LAMP-1 reverts this phenotype by interfering with the docking of lysosomes at the plasma membrane. In neu1-/- mice the excessive exocytosis of serine proteases in the bone niche leads to inactivation of extracellular serpins, premature degradation of VCAM-1, and loss of bone marrow retention. Our findings uncover an unexpected mechanism influencing lysosomal exocytosis and argue that exacerbations of this process form the basis for certain genetic diseases.