Engineered nanomaterials (ENMs) including multiwall carbon nanotubes (MWCNTs) and rare earth oxide (REO) nanoparticles, which are capable of activating the NLRP3 inflammasome and inducing IL-1β production, have the potential to cause chronic lung toxicity. Although it is known that lysosome damage is an upstream trigger in initiating this pro-inflammatory response, the same organelle is also an important homeostatic regulator of activated NLRP3 inflammasome complexes, which are engulfed by autophagosomes and then destroyed in lysosomes after fusion. Although a number of ENMs have been shown to induce autophagy, no definitive research has been done on the homeostatic regulation of the NLRP3 inflammasome during autophagic flux. We used a myeloid cell line (THP-1) and bone marrow derived macrophages (BMDM) to compare the role of autophagy in regulating inflammasome activation and IL-1β production by MWCNTs and REO nanoparticles. THP-1 cells express a constitutively active autophagy pathway and are also known to mimic NLRP3 activation in pulmonary macrophages. We demonstrate that, while activated NLRP3 complexes could be effectively removed by autophagosome fusion in cells exposed to MWCNTs, REO nanoparticles interfered in autophagosome fusion with lysosomes. This leads to the accumulation of the REO-activated inflammasomes, resulting in robust and sustained IL-1β production. The mechanism of REO nanoparticle interference in autophagic flux was clarified by showing that they disrupt lysosomal phosphoprotein function and interfere in the acidification that is necessary for lysosome fusion with autophagosomes. Binding of LaPO4 to the REO nanoparticle surfaces leads to urchin-shaped nanoparticles collecting in the lysosomes. All considered, these data demonstrate that in contradistinction to autophagy induction by some ENMs, specific materials such as REOs interfere in autophagic flux, thereby disrupting homeostatic regulation of activated NLRP3 complexes.