Mutations in MCOLN1, which encodes the cation channel protein TRPML1, result in the neurodegenerative lysosomal storage disorder Mucolipidosis type IV. Mucolipidosis type IV patients show lysosomal dysfunction in many tissues and neuronal cell death. The orthologue of TRPML1 in Caenorhabditis elegans is CUP-5; loss of CUP-5 results in lysosomal dysfunction in many tissues and death of developing intestinal cells that results in embryonic lethality. We previously showed that a null mutation in the ATP-Binding Cassette transporter MRP-4 rescues the lysosomal defect and embryonic lethality of cup-5(null) worms. Here we show that reducing levels of the Endosomal Sorting Complex Required for Transport (ESCRT)-associated proteins DID-2, PHI-33, and ALX-1/EGO-2, which mediate the final de-ubiquitination step of integral membrane proteins being sequestered into late endosomes, also almost fully suppress cup-5(null) mutant lysosomal defects and embryonic lethality. Indeed, we show that MRP-4 protein is hypo-ubiquitinated in the absence of CUP-5 and that reducing levels of ESCRT-associated proteins suppresses this hypo-ubiquitination. Thus, increased ESCRT-associated de-ubiquitinating activity mediates the lysosomal defects and corresponding cell death phenotypes in the absence of CUP-5.