Lysosomes are essential membrane-bound organelles that integrate intracellular needs and external signals through multiple functions, including autophagy-mediated degradation and MTORC1 signaling. The integrity of the lysosomal membrane is therefore crucial for maintaining cellular homeostasis. Various endogenous and exogenous factors can damage lysosomes, contributing to diseases such as infections, cancer, and neurodegeneration. In response, cells mount defensive mechanisms to cope with such stress, including the formation of stress granules (SGs) - membraneless organelles composed of RNAs and protein complexes. While SGs have emerged as key players in repairing damaged lysosomes, how lysosomal damage triggers their formation and influences cell fate remains unclear. Here we report that the calcium signal from damaged lysosomes mediates SG formation and protects cells from lysosomal damage-induced cell death. Mechanistically, calcium leakage from damaged lysosomes signals the recruitment of calcium-activating protein PDCD6IP/ALIX and its partner PDCD6/ALG2. This complex recruits protein kinase EIF2AK2/PKR and its activator PRKRA/PACT, which phosphorylates translation initiator factor EIF2S1, stalling global translation initiation. This translation arrest leads to the accumulation of inactive messenger ribonucleoprotein complexes (mRNPs), resulting in SG formation. Cells deficient in SG formation show increased cell death when exposed to lysosomal damage from disease-associated factors including SARS-CoV-2