Niemann-Pick type C1 (NPC1) disease is a rare neurodegenerative cholesterol and sphingolipid storage disorder primarily due to mutations in the cholesterol-trafficking protein NPC1. In addition to catabolic-derived sphingolipids, NPC1 dysfunction also leads to an increase in de novo sphingolipid biosynthesis, yet little is known about the cellular mechanism involved. Although deletion of NPC1 or inhibition of the NPC1 sterol binding domain enhanced de novo sphingolipid biosynthesis, surprisingly levels of the ORMDLs, the regulatory subunits of serine palmitoyltransferase (SPT), the rate-limiting step in sphingolipid biosynthesis, were also greatly increased. Nevertheless, less ORMDL was bound in the SPT-ORMDL complex despite elevated ceramide levels. Instead, ORMDL colocalized with p62, the selective autophagy receptor, and accumulated in stalled autophagosomes due to defective autophagy in NPC1 disease cells. Restoration of autophagic flux with N-acetyl-L-leucine in NPC1 deleted cells decreased ORMDL accumulation in autophagosomes and reduced de novo sphingolipid biosynthesis and their accumulation. This study revealed a previously unknown link between de novo sphingolipid biosynthesis, ORMDL, and autophagic defects present in NCP1 disease. In addition, we provide further evidence and mechanistic insight for the beneficial role of N-acetyl-L-leucine treatment for NPC1 disease which is presently awaiting approval from the Food and Drug Administration and the European Medicines Agency.