Sequestration of protein aggregates in inclusion bodies and their subsequent degradation prevents proteostasis imbalance, cytotoxicity, and proteinopathies. The underlying molecular mechanisms controlling the turnover of protein aggregates are mostly uncharacterized. Herein, we show that a TRIM family protein, TRIM16, governs the process of stress‐induced biogenesis and degradation of protein aggregates. TRIM16 facilitates protein aggregate formation by positively regulating the p62‐NRF2 axis. We show that TRIM16 is an integral part of the p62‐KEAP1‐NRF2 complex and utilizes multiple mechanisms for stabilizing NRF2. Under oxidative and proteotoxic stress conditions, TRIM16 activates ubiquitin pathway genes and p62 via NRF2, leading to ubiquitination of misfolded proteins and formation of protein aggregates. We further show that TRIM16 acts as a scaffold protein and, by interacting with p62, ULK1, ATG16L1, and LC3B, facilitates autophagic degradation of protein aggregates. Thus, TRIM16 streamlines the process of stress‐induced aggregate clearance and protects cells against oxidative/proteotoxic stress‐induced toxicity in vitro and in vivo. Taken together, this work identifies a new mechanism of protein aggregate turnover, which could be relevant in protein aggregation‐associated diseases such as neurodegeneration. Synopsis The tripartite motif‐containing ubiquitin ligase TRIM16 governs the stress‐induced formation of protein aggregate by regulating the NRF2 stress response pathway, and also mediates degradation of protein aggregates by engaging the autophagy machinery. TRIM16 associates with p62‐NRF2 complex to positively regulate its activity. TRIM16 and NRF2 governs the process of stress‐induced biogenesis of protein aggregates. TRIM16 acts as a scaffold protein to assemble the autophagy machinery for degradation of protein aggregates. TRIM16 protects cells from oxidative and proteotoxic stress‐induced cytotoxicity in vitro and in vivo. A tripartite motif‐containing ubiquitin ligase modifies the p62‐NRF2 complex for stress‐induced protein aggregation and provides an assembly scaffold for autophagy factors involved in aggregate clearance.