The sequestration of damaged mitochondria within double-membrane structures termed autophagosomes is a key step of PINK1/Parkin mitophagy. Autophagosomes are formed from a precursor membrane called a phagophore which originates at a cradle of membrane derived from the endoplasmic reticulum (ER). The Atg4 family of cysteine proteases are thought to regulate autophagosome formation exclusively by cleaving and de-lipidating the ubiquitin-like Atg8 family (LC3s and GABARAPs). Unexpectedly, we discover that human Atg4s promote autophagosome formation independently of their protease activity and of Atg8 family processing. Atg4 proximity networks using APEX2 biotinylation labelling approach reveal a role for Atg4s and their proximity partners, in protein/vesicle transport and lipid modification. High resolution structures of phagophores generated with artificial intelligence-directed 3D electron microscopy revealed a key role for the Atg4 family in promoting phagophore-ER contacts during the lipid-transfer phase of autophagosome formation. We also show that Atg8 removal during autophagosome maturation does not depend on Atg4 de-lipidation activity as previously thought. Instead, we find that Atg4s can disassemble Atg8-protein conjugates, revealing a role for Atg4s as deubiquitinating-like enzymes. These findings establish non-canonical roles of the Atg4 family beyond the Atg8 lipidation axis and provide an AI-driven framework for rapid 3D electron microscopy.