Chemical modulators of autophagy provide useful pharmacological tools for examination of autophagic processes, and also may lead to new therapeutic agents for diseases in which control of cellular sequestration and degradation capacity are beneficial. We have identified that timosaponin A-III (TAIII), a medicinal saponin reported to exhibit anticancer properties and improve brain function, is a pronounced activator of autophagy. In this work, the salient features and functional role of TAIII-induced autophagy were investigated. In TAIII-treated cells, autophagic flux with increased formation of autophagosomes and conversion into autolysosomes is induced in association with inhibition of mammalian target of rapamycin activity and elevation of cytosolic free calcium. The TAIII-induced autophagy is distinct from conventional induction by rapamycin, exhibiting large autophagic vacuoles that appear to contain significant contents of endosomal membranes and multivesicular bodies. Furthermore, TAIII stimulates biosynthesis of cholesterol, which is incorporated to the autophagic vacuole membranes. The TAIII-induced autophagic vacuoles capture ubiquitinated proteins, and in proteasome-inhibited cells TAIII promotes autophagy of aggregation-prone ubiquitinated proteins. Our studies demonstrate that TAIII induced a distinct form of autophagy, and one of its pharmacological actions is likely to enhance the cellular quality control capacity via autophagic clearance of otherwise accumulated ubiquitinated protein aggregates.