Chaperone-mediated autophagy (CMA) is a lysosome-dependent selective degradation pathway implicated in the pathogenesis of cancer and neurodegenerative diseases. However, the mechanisms that regulate CMA are not fully understood. Here, using unbiased drug screening approaches, we discover Metformin, a drug that is commonly the first medication prescribed for type 2 diabetes, can induce CMA. We delineate the mechanism of CMA induction by Metformin to be via activation of TAK1-IKKα/β signaling that leads to phosphorylation of Ser85 of the key mediator of CMA, Hsc70, and its activation. Notably, we find that amyloid-beta precursor protein (APP) is a CMA substrate and that it binds to Hsc70 in an IKKα/β-dependent manner. The inhibition of CMA-mediated degradation of APP enhances its cytotoxicity. Importantly, we find that in the APP/PS1 mouse model of Alzheimer's disease (AD), activation of CMA by Hsc70 overexpression or Metformin potently reduces the accumulated brain Aβ plaque levels and reverses the molecular and behavioral AD phenotypes. Our study elucidates a novel mechanism of CMA regulation via Metformin-TAK1-IKKα/β-Hsc70 signaling and suggests Metformin as a new activator of CMA for diseases, such as AD, where such therapeutic intervention could be beneficial.