Lysosomes critically rely on bis(monoacylglycero)phosphate (BMP) to stimulate lipid catabolism, cholesterol homeostasis, and lysosomal function. Alterations in BMP levels in monogenic and complex neurodegeneration suggest an essential function in human health. However, the site and mechanism responsible for BMP synthesis have been subject to debate for decades. Here, we report that the Batten disease gene product CLN5 is the elusive BMP synthase (BMPS). BMPS-deficient cells exhibit a massive accumulation of the BMP synthesis precursor lysophosphatidylglycerol (LPG), depletion of BMP species, and dysfunctional lipid metabolism. Mechanistically, we demonstrate that BMPS mediates synthesis through an energy-independent base exchange reaction between two LPG molecules with increased activity on BMP-laden vesicles. Our study resolves the long-sought BMP biosynthetic route and reveals a novel anabolic function of late endosomes/lysosomes.