The ubiquitin-proteasome system (UPS) and autophagy are two major quality control processes whose impairment is linked to a wide variety of diseases. The coordination between UPS and autophagy remains incompletely understood. Here, we show that ubiquitin ligase UBE3C and deubiquitinating enzyme TRABID reciprocally regulate K29/K48-branched ubiquitination of VPS34. We find that this ubiquitination enhances the binding of VPS34 to proteasomes for degradation, thereby suppressing autophagosome formation and maturation. Under ER and proteotoxic stresses, UBE3C recruitment to phagophores is compromised with a concomitant increase of its association with proteasomes. This switch attenuates the action of UBE3C on VPS34, thereby elevating autophagy activity to facilitate proteostasis, ER quality control and cell survival. Specifically in the liver, we show that TRABID-mediated VPS34 stabilization is critical for lipid metabolism and is downregulated during the pathogenesis of steatosis. This study identifies a ubiquitination type on VPS34 and elucidates its cellular fate and physiological functions in proteostasis and liver metabolism.