MAP1LC3/LC3 (a mammalian ortholog family of yeast Atg8) is a ubiquitin-like protein that is essential for autophagosome formation. LC3 is conjugated to phosphatidylethanolamine on phagophores and ends up distributed both inside and outside the autophagosome membrane. One of the well-known functions of LC3 is as a binding partner for receptor proteins, which target polyubiquitinated organelles and proteins to the phagophore through direct interaction with LC3 in selective autophagy, and their LC3-binding ability is essential for degradation of the polyubiquitinated substances. Although a number of LC3-binding proteins have been identified, it is unknown whether they are substrates of autophagy or how their interaction with LC3 is regulated. We previously showed that one LC3-binding protein, TBC1D25/OATL1, plays an inhibitory role in the maturation step of autophagosomes and that this function depends on its binding to LC3. Interestingly, TBC1D25 seems not to be a substrate of autophagy, despite being present on the phagophore. In this study we investigated the molecular basis for the escape of TBC1D25 from autophagic degradation by performing a chimeric analysis between TBC1D25 and SQSTM1/p62 (sequestosome 1), and the results showed that mutant TBC1D25 with an intact LC3-binding site can become an autophagic substrate when TBC1D25 is forcibly oligomerized. In addition, an ultrastructural analysis showed that TBC1D25 is mainly localized outside autophagosomes, whereas an oligomerized TBC1D25 mutant rather uniformly resides both inside and outside the autophagosomes. Our findings indicate that oligomerization is a key factor in the degradation of LC3-binding proteins and suggest that lack of oligomerization ability of TBC1D25 results in its asymmetric localization at the outer autophagosome membrane.