Developmental axon pruning is essential for wiring the mature nervous system, but its regulation remains poorly understood. Here we show that the endosomal-lysosomal pathway regulates developmental pruning of Drosophila mushroom body γ neurons. We demonstrate that the UV radiation resistance-associated gene (UVRAG) functions together with all core components of the phosphatidylinositol 3-kinase class III (PI3K-cIII) complex to promote pruning via the endocytic pathway. By studying several PI(3)P binding proteins, we found that Hrs, a subunit of the ESCRT-0 complex, required for multivesicular body (MVB) maturation, is essential for normal pruning progression. Thus, we hypothesized the existence of an inhibitory signal that needs to be downregulated. Finally, our data suggest that the Hedgehog receptor, Patched, is the source of this inhibitory signal likely functioning in a Smo-independent manner. Taken together, our in vivo study demonstrates that the PI3K-cIII complex is essential for downregulating Patched via the endosomal-lysosomal pathway to execute axon pruning.