Autophagy is an essential cellular process that removes harmful protein species, and autophagy upregulation may be able to protect against neurodegeneration and various pathogens. Here, we have identified the essential protein VCP/p97 (VCP, valosin-containing protein) as a novel regulator of autophagosome biogenesis, where VCP regulates autophagy induction in two ways, both dependent on Beclin-1. Utilizing small-molecule inhibitors of VCP ATPase activity, we show that VCP stabilizes Beclin-1 levels by promoting the deubiquitinase activity of ataxin-3 towards Beclin-1. VCP also regulates the assembly and activity of the Beclin-1-containing phosphatidylinositol-3-kinase (PI3K) complex I, thus regulating the production of PI(3)P, a key signaling lipid responsible for the recruitment of downstream autophagy factors. A decreased level of VCP, or inhibition of its ATPase activity, impairs starvation-induced production of PI(3)P and limits downstream recruitment of WIPI2, ATG16L and LC3, thereby decreasing autophagosome formation, illustrating an important role for VCP in early autophagy initiation.