Cdc14 protein phosphatase is critical for late mitosis progression in budding yeast, although its orthologs in other organisms, including mammalian cells, function as stress-responsive phosphatases. We found herein unexpected roles of Cdc14 in autophagy induction after nutrient starvation and target of rapamycin complex 1 (TORC1) kinase inactivation. TORC1 kinase phosphorylates Atg13 to repress autophagy under nutrient-rich conditions, but if TORC1 becomes inactive upon nutrient starvation or rapamycin treatment, Atg13 is rapidly dephosphorylated and autophagy is induced. Cdc14 phosphatase was required for optimal Atg13 dephosphorylation, pre-autophagosomal structure formation, and autophagy induction after TORC1 inactivation. In addition, Cdc14 was required for sufficient induction of ATG8 and ATG13 expression. Moreover, Cdc14 activation provoked autophagy even under normal conditions. This study identified a novel role of Cdc14 as the stress-responsive phosphatase for autophagy induction in budding yeast.