Ataxia-telangiectasia (A-T) is a cerebellar neurodegenerative disorder; however, the basis for the neurodegeneration in A-T is not well established. Lesions in the ubiquitin and autophagy pathways are speculated to contribute to the neurodegeneration in other neurological diseases and may have a role in A-T neurodegeneration. Our recent studies revealed that the constitutively elevated ISG15 pathway impairs targeted proteasome-mediated protein degradation in A-T cells. Here, we demonstrate that the basal autophagy pathway is activated in the ubiquitin pathway-compromised A-T cells. We also show that genotoxic stress triggers aberrant degradation of the proteasome and autophagy substrates (autophagic flux) in A-T cells. Inhibition of autophagy at an early stage using 3-methyladenine blocked UV-induced autophagic flux in A-T cells. On the other hand, bafilomycin A1, which inhibits autophagy at a late stage, failed to block UV-induced autophagic flux, suggesting that overinduction of autophagy may underlie aberrant autophagic flux in A-T cells. The ISG15-specific shRNA that restored proteasome function restores autophagic function in A-T cells. These findings suggest that autophagy compensates for the ISG15-dependent ablation of proteasome-mediated protein degradation in A-T cells. Genotoxic stress overactivates this compensatory mechanism, triggering aberrant autophagic flux in A-T cells. Supporting the model, we show that autophagy is activated in the brain tissues of human A-T patients. This highlights a plausible causal contribution of a novel "ISG15 proteinopathy" in A-T neuronal cell death.