Although the causes of hepatotoxicity among alcohol-abusing HIV patients are multifactorial, alcohol remains the least explored “second hit” for HIV-related hepatotoxicity. Here, we investigated whether metabolically derived acetaldehyde impairs lysosomes to enhance HIV-induced hepatotoxicity. We exposed Cytochrome P450 2E1 (CYP2E1)-expressing Huh 7.5 (also known as RLW) cells to an acetaldehyde-generating system (AGS) for 24 h. We then infected (or not) the cells with HIV-1ADA then exposed them again to AGS for another 48 h. Lysosome damage was assessed by galectin 3/LAMP1 co-localization and cathepsin leakage. Expression of lysosome biogenesis–transcription factor, TFEB, was measured by its protein levels and by in situ immunofluorescence. Exposure of cells to both AGS + HIV caused the greatest amount of lysosome leakage and its impaired lysosomal biogenesis, leading to intrinsic apoptosis. Furthermore, the movement of TFEB from cytosol to the nucleus via microtubules was impaired by AGS exposure. The latter impairment appeared to occur by acetylation of α-tubulin. Moreover, ZKSCAN3, a repressor of lysosome gene activation by TFEB, was amplified by AGS. Both these changes contributed to AGS-elicited disruption of lysosome biogenesis. Our findings indicate that metabolically generated acetaldehyde damages lysosomes and likely prevents their repair and restoration, thereby exacerbating HIV-induced hepatotoxicity.