The role of proteostasis and organelle homeostasis dysfunction in human aging and Alzheimer's disease (AD) remains unclear. Analyzing proteome-wide changes in human donor fibroblasts and their corresponding transdifferentiated neurons (tNeurons), we find aging and AD synergistically impair multiple proteostasis pathways, most notably lysosomal quality control (LQC). In particular, we show that ESCRT-mediated lysosomal repair defects are associated with both sporadic and PSEN1 familial AD. Aging- and AD-linked defects are detected in fibroblasts but highly exacerbated in tNeurons, leading to enhanced neuronal vulnerability, unrepaired lysosomal damage, inflammatory factor secretion and cytotoxicity. Surprisingly, tNeurons from aged and AD donors spontaneously develop amyloid-β inclusions co-localizing with LQC markers, LAMP1/2-positive lysosomes and proteostasis factors; we observe similar inclusions in brain tissue from AD patients and APP-transgenic mice. Importantly, compounds enhancing lysosomal function broadly ameliorate these AD-associated pathologies. Our findings establish cell-autonomous LQC dysfunction in neurons as a central vulnerability in aging and AD pathogenesis.