Lysosomes robustly accumulate within axonal swellings at Alzheimer’s disease (AD) amyloid plaques. However, the underlying mechanisms and disease relevance of such lysosome accumulations are not well understood. Motivated by these problems, we identified JNK-interacting protein 3 (JIP3) as an important regulator of axonal lysosome transport and maturation. JIP3 knockout mouse neuron primary cultures accumulate lysosomes within focal axonal swellings that resemble the dystrophic axons at amyloid plaques. These swellings contain high levels of amyloid precursor protein processing enzymes (BACE1 and presenilin 2) and are accompanied by elevated Aβ peptide levels. The in vivo importance of the JIP3-dependent regulation of axonal lysosomes was revealed by the worsening of the amyloid plaque pathology arising from JIP3 haploinsufficiency in a mouse model of AD. These results establish the critical role of JIP3-dependent axonal lysosome transport in regulating amyloidogenic amyloid precursor protein processing and support a model wherein Aβ production is amplified by plaque-induced axonal lysosome transport defects.