Autophagy has been shown to be a key cellular event controlling tumor growth in different neoplasms including hepatocellular carcinoma (HCC). Although this biological role of autophagy has been clearly established, the mechanism underlying its regulation remains elusive. Here, we demonstrate a role of sulfatase 2 (SULF2), a 6-O-endosulfatase modulating various growth factors and cytokine-related signaling pathways controlling tumor cell proliferation and survival, in the regulation of autophagy in HCC cells. SULF2 increased autophagosome formation, shown by increased LC3B-II protein and green fluorescent protein–LC3 puncta. Increased fusion between autophagosomes and lysosomes/lysosomal enzymes, higher expression of lysosomal membrane protein, and an increase in autolysosomes were also shown by western blot, immunofluorescence, and electron microscopy of SULF2-expressing cells, indicating enhanced autophagic flux. In contrast, RNA-interference silencing of SULF2 in Huh7 cells induced lysosomal membrane permeabilization with diffuse cytosolic staining of cathepsin D and punctate staining of galectin-3. Analysis of the mechanism showed that inhibition of lysosome-associated protein transmembrane 4 beta (LAPTM4B), a gene induced by SULF2, resulted in decreased autophagosome formation, decreased fusion between autophagosomes and lysosomes, and increased lysosomal membrane permeabilization. Interestingly, down-regulation of LAPTM4B also phenocopies the knockdown of SULF2, significantly reducing cell viability and colony formation. Conclusion: Our results demonstrate a role for SULF2 in the regulation of autophagic flux that is mediated through LAPTM4B induction in HCC cells, and provide a foundation for future translational efforts targeting autophagy in liver malignancies.