Breakdown of every transmembrane protein trafficked to lysosomes requires proteolysis of their hydrophobic helical transmembrane domains. Combining lysosomal proteomics with functional genomic datasets, we identified lysosomal leucine aminopeptidase (LyLAP
formerly phospholipase B domain-containing 1) as the hydrolase most tightly associated with elevated endocytosis. Untargeted metabolomics and biochemical reconstitution demonstrated that LyLAP is a processive monoaminopeptidase with preference for amino-terminal leucine. This activity was necessary and sufficient for the breakdown of hydrophobic transmembrane domains. LyLAP was up-regulated in pancreatic ductal adenocarcinoma (PDA), which relies on macropinocytosis for nutrient uptake. In PDA cells, LyLAP ablation led to the buildup of undigested hydrophobic peptides, lysosomal membrane damage, and growth inhibition. Thus, LyLAP enables lysosomal degradation of membrane proteins and protects lysosomal integrity in highly endocytic cancer cells.