The endolysosomal system is critical for the maintenance of cellular homeostasis. However, how endolysosomal compartment is regulated by mitochondrial function is largely unknown. We have generated a mouse model with defective mitochondrial function in CD4(+) T lymphocytes by genetic deletion of the mitochondrial transcription factor A (Tfam). Mitochondrial respiration deficiency impairs lysosome function, promotes p62 and sphingomyelin accumulation, and disrupts endolysosomal trafficking pathways and autophagy, thus linking a primary mitochondrial dysfunction to a lysosomal storage disorder. The impaired lysosome function in Tfam-deficient cells subverts T cell differentiation toward proinflammatory subsets and exacerbates the in vivo inflammatory response. Restoration of NAD(+) levels improves lysosome function and corrects the inflammatory defects in Tfam-deficient T cells. Our results uncover a mechanism by which mitochondria regulate lysosome function to preserve T cell differentiation and effector functions, and identify strategies for intervention in mitochondrial-related diseases.