Inactivation of constitutive autophagy results in formation of cytoplasmic protein inclusions and leads to liver injury and neurodegeneration, but the details of abnormalities related to impaired autophagy are largely unknown. Here we used mouse genetic analyses to define the roles of autophagy in the aforementioned events. We report that the ubiquitin- and LC3-binding protein "p62" regulates the formation of protein aggregates and is removed by autophagy. Thus, genetic ablation of p62 suppressed the appearance of ubiquitin-positive protein aggregates in hepatocytes and neurons, indicating that p62 plays an important role in inclusion body formation. Moreover, loss of p62 markedly attenuated liver injury caused by autophagy deficiency, whereas it had little effect on neuronal degeneration. Our findings highlight the unexpected role of homeostatic level of p62, which is regulated by autophagy, in controlling intracellular inclusion body formation, and indicate that the pathologic process associated with autophagic deficiency is cell-type specific.