Epithelial endocytosis is essential for physiological homeostasis. The current dogma is that all endocytotic mechanisms involve only single-membrane vesicles at the plasma membrane. Here, we report a previously undescribed LC3-associated phagocytosis mechanism which forms double-membrane phagosomes from the epithelial tight-junction paracellular membranes, which we term “paraphagy”. We observed that paraphagy is present in epithelia of the renal, respiratory, circulatory, and male reproductive systems. In the epididymis, paraphagy takes up lipophilic cargo, including apolipoproteins, by involving the surface low-affinity IgG-receptor Fcgr2b and occludin-bound intracellular HDL-receptor ATP5b. In this way, extracellular lipophilic signals are sensed and intracellular phagolysosomes are maintained. Occludin-null male mice show arrested paraphagy and impaired phagolysosome in proximal epididymal compartments, accompanying cholesterol accumulation, ApoJ deposition and dysregulated metabolic-dependent processes in distal compartments, including redox-promoted VK-dependent MGP-carboxylation. We propose that paraphagy senses and distinguishes the luminal lipophilic signals in epithelia and modulates their function via crosstalk across physiological compartments.