Lysosomes are involved in degrading and recycling cellular ingredients, and their disruption with age may contribute to amyloidogenesis, paired helical filaments, and α-synuclein and mutant huntingtin aggregation. Lysosomal cathepsins are up-regulated by accumulating proteins and more so by Z-Phe-Ala-diazomethylketone (PADK). The latter positive modulator was evaluated in the well-characterized hippocampal slice model of lysosomal dysfunction that exhibits tau aggregation, tubulin breakdown, microtubule destabilization, transport failure, and synaptic decline. Active cathepsins were up-regulated by PADK, Rab proteins were modified indicating enhanced trafficking, whereas LAMP and proteasome markers were unchanged. Concomitantly, PADK reduced the PHF deposits, restored tubulin structure and transport, and recovered synaptic proteins. Further proof-of-principle studies utilized Alzheimer’s disease mouse models (APPSwInd, APPswe/PS1ΔE9). Systemic PADK caused 3-10-fold increases in cathepsin B activity, while neprilysin and insulin-degrading enzyme remained unchanged. Also in both PADK-treated transgenic models, production of the less pathogenic Aβ1-38 corresponded with decreased Aβ1-42 levels. These findings suggest that lysosomal modulation reduces Aβ1-42 through intracellular truncation that also influences extracellular deposition, with one or both effects explaining the elimination of behavioral and synaptic protein deficits. Unique lysosomal modulators represent a strategy against protein accumulation disorders, after critical consideration of the pathogenic stage at which treatment is administered.