VCP (VCP/p97) is a ubiquitously expressed member of the AAA(+)-ATPase family of chaperone-like proteins that regulates numerous cellular processes including chromatin decondensation, homotypic membrane fusion and ubiquitin-dependent protein degradation by the proteasome. Mutations in VCP cause a multisystem degenerative disease consisting of inclusion body myopathy, Paget disease of bone, and frontotemporal dementia (IBMPFD). Here we show that VCP is essential for autophagosome maturation. We generated cells stably expressing dual-tagged LC3 (mCherry-EGFP-LC3) which permit monitoring of autophagosome maturation. We determined that VCP deficiency by RNAi-mediated knockdown or overexpression of dominant-negative VCP results in significant accumulation of immature autophagic vesicles, some of which are abnormally large, acidified and exhibit cathepsin B activity. Furthermore, expression of disease-associated VCP mutants (R155H and A232E) also causes this autophagy defect. VCP was found to be essential to autophagosome maturation under basal conditions and in cells challenged by proteasome inhibition, but not in cells challenged by starvation, suggesting that VCP might be selectively required for autophagic degradation of ubiquitinated substrates. Indeed, a high percentage of the accumulated autophagic vesicles contain ubiquitin-positive contents, a feature that is not observed in autophagic vesicles that accumulate following starvation or treatment with Bafilomycin A. Finally, we show accumulation of numerous, large LAMP-1 and LAMP-2-positive vacuoles and accumulation of LC3-II in myoblasts derived from patients with IBMPFD. We conclude that VCP is essential for maturation of ubiquitin-containing autophagosomes and that defect in this function may contribute to IBMPFD pathogenesis.