Germline P granules are specialized protein/RNA aggregates that are found exclusively in germ cells in C. elegans. During the early embryonic divisions that generate germ blastomeres, aggregate-prone P granule components PGL-1 and PGL-3 that remain in the cytoplasm destined for somatic daughters are selectively removed by autophagy. Loss-of-function of components of the autophagy pathway, including the VPS-34/BEC-1 complex, causes accumulation of PGL-1 and PGL-3 into aggregates in somatic cells (termed PGL granules). Formation of PGL granules depends on SEPA-1, which is an integral component of these granules. SEPA-1 is preferentially degraded by autophagy and is also required for the autophagic degradation of PGL-1 and PGL-3. SEPA-1 functions as a bridging molecule in mediating degradation of P granule components by directly interacting with PGL-3 and also with the autophagy protein LGG-1/Atg8. The defect in embryonic development in autophagy mutants is suppressed by mutation of sepa-1, suggesting that autophagic degradation of PGL granule components may provide nutrients for embryogenesis and/or also prevent the formation of aggregates that could be toxic for animal development. Our study reveals a specific physiological function of selective autophagic degradation during C. elegans development.