Mutations in either ClC-7, a late endosomal/lysosomal member of the CLC family of chloride channels and transporters, or in its beta-subunit Ostm1 cause osteopetrosis and lysosomal storage disease in mice and humans. The severe phenotype of mice globally deleted for ClC-7 or Ostm1 and the absence of storage material in cultured cells hampered investigations of the mechanism leading to lysosomal pathology in the absence of functional ClC-7/Ostm1 transporters. Tissue-specific ClC-7-knockout mice now reveal that accumulation of storage material occurs cell-autonomously in neurons or renal proximal tubular cells lacking ClC-7. Almost all ClC-7-deficient neurons die. The activation of glia is restricted to brain regions where ClC-7 has been inactivated. The effect of ClC-7 disruption on lysosomal function was investigated in renal proximal tubular cells, which display high endocytotic activity. Pulse-chase endocytosis experiments in vivo with mice carrying chimeric deletion of ClC-7 in proximal tubules allowed a direct comparison of the handling of endocytosed protein between cells expressing or lacking ClC-7. Whereas protein was endocytosed similarly in cells of either genotype, its half-life increased significantly in ClC-7-deficient cells. These experiments demonstrate that lysosomal pathology is a cell-autonomous consequence of ClC-7 disruption and that ClC-7 is important for lysosomal protein degradation.