Two major proteolytic systems, the proteasome and the autophagy pathway, are key components of the proteostasis network. The immunoproteasome, a proteasome subtype, and autophagy are upregulated under stress conditions, forming a coordinated unit designed to minimize the effect of cell stress. We investigated how genetic ablation of the LMP2 immunoproteasome subunit affects autophagy in retinal pigment epithelium (RPE) from WT and LMP2 knockout mice. We monitored autophagy regulation by measuring LC3, phosphorylation of AKT (S473), and phosphorylation of S6, a downstream readout of AKT (mTOR) pathway activation. We also evaluated transcription factor EB (TFEB) nuclear translocation, a transcription factor that controls expression of autophagy and lysosome genes. WT and LMP2 KO cells were monitored after treatment with EBSS to stimulate autophagy, insulin to stimulate AKT, or an AKT inhibitor (trehalose or MK-2206). Under basal conditions, we observed hyper-phosphorylation of AKT and S6, as well as lower nuclear-TFEB content in LMP2 KO RPE compared with WT. AKT inhibitors MK-2206 and trehalose significantly inhibited AKT phosphorylation and stimulated nuclear translocation of TFEB. Starvation and AKT inhibition upregulated autophagy, albeit to a lesser extent in LMP2 KO RPE. These data support the idea that AKT hyper-activation is an underlying cause of defective autophagy regulation in LMP2 KO RPE, revealing a unique link between two proteolytic systems and a previously unknown function in autophagy regulation by the immunoproteasome.