The repertoire of the lysosomal system extends beyond its function in degrading biologic macromolecules for energy and recycling purposes. Controlled shifts in lysosomal activity help neurons to regulate their cytoplasmic volume and to remodel local cellular domains. Newly identified regulatory controls over targeting to lysosomes and the limited proteolytic actions of 'lysosomal' hydrolases, together with other recent findings, are suggesting potential roles for the endosomal-lysosomal system in modifying functions of specific proteins, acquiring nutrients essential for growth and repair, influencing the output of secretory products, and helping neurons to modulate trophic signals. The prominent involvement of the endosomal-lysosomal system in Alzheimer's disease and other major pathologies has redoubled interest in how this system serves neurons.