Amyotrophic Lateral Sclerosis (ALS) and Frontotemporal Dementia (FTD) are two neurodegenerative diseases, among others, characterized by protein aggregation, specifically TDP-43 aggregation. Primarily, TDP-43 is localized in the nucleus, but research suggests that individuals with ALS and FTD show nuclear depletion and cytoplasmic aggregation of TDP-43 as well as sleep defects. In vitro experiments indicate the formation of stress granules (SGs), which are molecules that form when the cell is under stress and which are marked by G3BP1 in human cells. However, the mechanistic role and cellular implications of stress granule formation with respect to sleep deprivation and TDP-43 aggregation have not been fully explored in vivo. Here we use p62, ATG8a, TDP-43, and tubulin to investigate lysosomal activity in the presence of stress granules using Drosophila and iPSCs from human neuronal cells. In Drosophila, we found that TDP-43 overexpression induces sleep loss, and when the formation of stress granules is inhibited by the G3BP1 homolog Raspurin, sleep loss occurs even earlier. In human cells, we observed that stress granules inhibit lysosomal activity, which then inhibits the breakdown of TDP-43 in the cytoplasm.