In mammalian cells, endoplasmic reticulum (ER) stress has recently been shown to induce autophagy and the induction requires the unfolded protein response (UPR) signaling pathways. However, little is known whether autophagy regulates UPR pathways and how specific UPR targets might control autophagy. Here, we demonstrated that although ER stress-induced autophagy was suppressed by class III phosphatidylinositol-3'-kinase (PI3KC3) inhibitor 3-methyladenine (3-MA), wortmannin and knockdown of Beclin1 using small interfering RNA (siRNA), only 3-MA suppressed UPR activation. We discovered that the UPR regulator and ER chaperone GRP78/BiP is required for stress-induced autophagy. In cells in which GRP78 expression was knocked down by siRNA, despite spontaneous activation of UPR pathways and LC3 conversion, autophagosome formation induced by ER stress as well as by nutrition starvation was inhibited. GRP78 knockdown did not disrupt PI3KC3-Beclin1 association. However, electron microscopic analysis of the intracellular organelle structure reveals that the ER, a putative membrane source for generating autophagosomal double membrane, was massively expanded and disorganized in cells in which GRP78 was knocked down. ER expansion is known to be dependent on the UPR transcription factor XBP-1. Simultaneous knockdown of GRP78 and XBP-1 recovered normal levels of stress-induced autophagosome formation. Thus, these studies uncover 3-MA as an inhibitor of UPR activation and establish GRP78 as a novel obligatory component of autophagy in mammalian cells.