LGP85 (LIMP II) is a type III transmembrane glycoprotein that is located primarily in the limiting membranes of lysosomes and late endosomes. Despite being the abundant molecule of these compartments, whether LGP85 merely resides as one of the constituents of these membranes or plays a role in the regulation of endosome and lysosome biogenesis remains unclear. To elucidate these questions, we examined the effects of overexpression of LGP85 on the morphology and membrane traffic of the endosomal/lysosomal system. Here we demonstrate that overexpression of LGP85 causes an enlargement of early endosomes and late endosomes/lysosomes. Such a morphological alteration was not observed by overexpression of other lysosomal membrane proteins, LGP107 (LAMP-1) or LGP96 (LAMP-2), reflecting a LGP85-specific function. We further demonstrate that overexpression of LGP85 impairs the endocytic membrane traffic out of these enlarged compartments, which may be correlated with or account for the accumulation of cholesterol observed in these compartments. Interestingly, co-transfection of LGP85 and the dominant-negative form of Rab5b (Rab5bS34N) abolished the formation of large vacuoles, suggesting that the GTP-bound active form of Rab5b is involved in the enlargement of endosomal/lysosomal compartments induced by overexpression of LGP85. Thus, these findings provide important new insights into the role of LGP85 in the biogenesis and the maintenance of endosomes/lysosomes. We conclude that LGP85 may participate in reorganizing the endosomal/lysosomal compartments.