As early endosomes mature, the SAND-1/CCZ-1 complex acts as a guanine nucleotide exchange factor (GEF) for RAB-7 to promote the activity of its effector, HOPS, which facilitates late endosome-lysosome fusion and the consumption of AP-3-containing vesicles. We show that CCZ-1 and the HOPS complex are essential for the biogenesis of gut granules, cell type-specific, lysosome-related organelles (LROs) that coexist with conventional lysosomes in Caenorhabditis elegans intestinal cells. The HOPS subunit VPS-18 promotes the trafficking of gut granule proteins away from lysosomes and functions downstream of or in parallel to the AP-3 adaptor. CCZ-1 also acts independently of AP-3, and ccz-1 mutants mistraffic gut granule proteins. Our results indicate that SAND-1 does not participate in the formation of gut granules. In the absence of RAB-7 activity, gut granules are generated; however, their size and protein composition are subtly altered. These observations suggest that CCZ-1 acts in partnership with a protein other than SAND-1 as a GEF for an alternate Rab to promote gut granule biogenesis. Point mutations in GLO-1, a Rab32/38-related protein, predicted to increase spontaneous guanine nucleotide exchange, specifically suppress the loss of gut granules by ccz-1 and glo-3 mutants. GLO-3 is known to be required for gut granule formation and has homology to SAND-1/Mon1-related proteins, suggesting that CCZ-1 functions with GLO-3 upstream of the GLO-1 Rab, possibly as a GLO-1 GEF. These results support LRO formation occurring via processes similar to conventional lysosome biogenesis, albeit with key molecular differences.