The amyloid precursor protein (APP) is a structurally and functionally conserved transmembrane protein whose physiological role in adult brain function and health is still unclear. Because mutations in APP cause familial Alzheimer's disease (fAD), most research focuses on this aspect of APP biology. We investigated the physiological function of APP in the adult brain using the fruit fly Drosophila melanogaster, which harbors a single APP homologue called APP Like (APPL). Previous studies have provided evidence for the implication of APPL in neuronal wiring and axonal growth through the Wnt signaling pathway during development. However, like APP, APPL continues to be expressed in all neurons of the adult brain where its functions and their molecular and cellular underpinnings are unknown. We report that APPL loss of function (LOF) results in the dysregulation of endolysosomal function in neurons, with a notable enlargement of early endosomal compartments followed by neuronal cell death and the accumulation of dead neurons in the brain during a critical period at a young age. These defects can be rescued by reduction in the levels of the early endosomal regulator Rab5, indicating a causal role of endosomal function for cell death. Finally, we show that the secreted extracellular domain of APPL interacts with glia and regulates the size of their endosomes, the expression of the Draper engulfment receptor, and the clearance of neuronal debris in an axotomy model. We propose that APP proteins represent a novel family of neuroglial signaling factors required for adult brain homeostasis.