We recently identified elevated annexin A6 (AnxA6) protein levels in Niemann–Pick-type C1 (NPC1) mutant cells. In these cells, AnxA6 depletion rescued the cholesterol accumulation associated with NPC1 deficiency. Here, we demonstrate that elevated AnxA6 protein levels in NPC1 mutants or upon pharmacological NPC1 inhibition, using U18666A, were not due to upregulated AnxA6 mRNA expression, but caused by defects in AnxA6 protein degradation. Two KFERQ-motifs are believed to target AnxA6 to lysosomes for chaperone-mediated autophagy (CMA), and we hypothesized that the cholesterol accumulation in endolysosomes (LE/Lys) triggered by the NPC1 inhibition could interfere with the CMA pathway. Therefore, AnxA6 protein amounts and cholesterol levels in the LE/Lys (LE-Chol) compartment were analyzed in NPC1 mutant cells ectopically expressing lysosome-associated membrane protein 2A (Lamp2A), which is well known to induce the CMA pathway. Strikingly, AnxA6 protein amounts were strongly decreased and coincided with significantly reduced LE-Chol levels in NPC1 mutant cells upon Lamp2A overexpression. Therefore, these findings suggest Lamp2A-mediated restoration of CMA in NPC1 mutant cells to lower LE-Chol levels with concomitant lysosomal AnxA6 degradation. Collectively, we propose CMA to permit a feedback loop between AnxA6 and cholesterol levels in LE/Lys, encompassing a novel mechanism for regulating cholesterol homeostasis in NPC1 disease.