Alzheimer’s Disease (AD) is the most common neurodegenerative disorder in the elderly. Beta-amyloid (Aβ) peptide accumulation is considered as a primary cause of AD pathogenesis, with defective autophagy in patients’ brains. Enhanced autophagic activity has been reported to promote Aβ clearance in vitro and in vivo models. Meanwhile, there is growing evidence that estrogen receptor β (ERβ) is a viable therapeutic target that can ameliorate the pathological features associated with AD. Very little is known about the detailed molecular mechanisms underlying the relationship between ERβ, autophagy, and Aβ degradation in AD. This study aims to uncover whether ERβ participates in autophagy and promotes extracellular Aβ_1–42 degradation through the autophagy–lysosome system. Here we find that overexpression of ERβ caused autophagic activation as seen by increased microtubule-associated protein 1 light chain 3-II (LC3-II), SQSTM1 (sequestosome 1) degradation, LC3 punctate distribution, autophagosome, and autolysosome accumulation. In addition, we show that ERβ could induce autophagy through direct protein–protein interaction with ATG7 (E1-like enzyme). Furthermore, ERβ-mediated decrease in Aβ_1–42 was blocked by the autophagy inhibitor chloroquine (CQ) in SH-SY5Y cells and the HEK293T (AβPPsw) model. Aβ_1–42 or CQ induced cytotoxicity was restored by a selective ERβ activator diarylpropionitrile (DPN). Collectively, these data indicate that overexpression of ERβ exerts a neuroprotective effect through interacting with ATG7 protein and further enhances autophagy–lysosomal activity for Aβ_1–42 clearance at the cellular level.