The mechanistic target of rapamycin complex 1 (mTORC1) is a key metabolic hub that controls the cellular response to environmental cues by exerting its kinase activity on multiple substrates(1-3). However, whether mTORC1 responds to diverse stimuli by differentially phosphorylating specific substrates is poorly understood. Here we show that transcription factor EB (TFEB), a master regulator of lysosomal biogenesis and autophagy(4,5), is phosphorylated by mTORC1 via a substrate-specific mechanism that is mediated by Rag GTPases. Owing to this mechanism, the phosphorylation of TFEB-unlike other substrates of mTORC1, such as S6K and 4E-BP1- is strictly dependent on the amino-acid-mediated activation of RagC and RagD GTPases, but is insensitive to RHEB activity induced by growth factors. This mechanism has a crucial role in Birt-Hogg-Dube syndrome, a disorder that is caused by mutations in the RagC and RagD activator folliculin (FLCN) and is characterized by benign skin tumours, lung and kidney cysts and renal cell carcinoma(6,7). We found that constitutive activation of TFEB is the main driver of the kidney abnormalities and mTORC1 hyperactivity in a mouse model of Birt-Hogg-Dube syndrome. Accordingly, depletion of TFEB in kidneys of these mice fully rescued the disease phenotype and associated lethality, and normalized mTORC1 activity. Our findings identify a mechanism that enables differential phosphorylation of mTORC1 substrates, the dysregulation of which leads to kidney cysts and cancer. Dysregulation of an mTORC1 substrate-specific mechanism leads to constitutive activation of TFEB, and promotes kidney cystogenesis and tumorigenesis in a mouse model of Birt-Hogg-Dube syndrome.