The dysregulation of redox homeostasis in mammalian embryonic development has been shown to result in developmental defects and lethality. A major regulator of both redox homeostasis and metabolism is the transcription factor nuclear factor erythroid 2-related factor 2 (Nrf2). Hyperactivating mutations in Nrf2 have been found in several cases of inborn de novo mutations and frequent in multiple cancer types. However, its role in development is still poorly understood. In this study, we utilized Kelch-like ECH-associated protein 1 (Keap1) loss-of-function (LOF) zebrafish larvae to investigate the biological and metabolic consequences of Nrf2 activation during development. Keap1 is a CUL3-ubiquitin ligase complex adapter that negatively regulates Nrf2. Keap1 LOF larvae were generated by microinjecting CRISPR/Cas9 editing complexes targeting both keap1a and keap1b in zebrafish embryos. Loss of Keap1 induced lethality from 8 to 10 days post fertilization (dpf). Interestingly, Keap1 deficient larvae exhibited severe liver abnormalities that were preceded by intense beta-galactosidase (B-gal) staining. Mechanistic studies revealed that the B-gal staining was not due to induction of senescence, but rather aberrant lysosomal biogenesis. Strikingly, transcriptomic analysis demonstrated that loss of Keap1 triggered chronic induction of the Tfeb/Tfe3 transcriptional program that regulates lysosomal biogenesis. These results were recapitulated in Keap1 knock-out lines of HepG2 liver cancer cells showing demonstrating conservation in mammalian systems. Interestingly, knockout of Bach1 did not rescue the phenotypes. Remarkably, Nrf2 depletion rescued the lysosomal defects and subsequent lethality observed in Keap1 deficient larvae. Overall, our studies reveal that loss of Keap1 induces a Nrf2-mediated lethal phenotype that is preceded by aberrant Tfeb/Tfe3 activity resulting to the induction of lysosomal biogenesis. Furthermore, we have shown a novel role of Nrf2 in the regulation of lysosomal biogenesis which may be exploited in Nrf2-driven cancers.