The most common genetic cause for amyotrophic lateral sclerosis and frontotemporal dementia (ALS-FTD) is repeat expansion of a hexanucleotide sequence (GGGGCC) within the C9orf72 genomic sequence. To elucidate the functional role of C9orf72 in disease pathogenesis, we identified certain molecular interactors of this factor. We determined that C9orf72 exists in a complex with SMCR8 and WDR41 and that this complex acts as a GDP/GTP exchange factor for RAB8 and RAB39, 2 RAB GTPases involved in macroautophagy/autophagy. Consequently, C9orf72 depletion in neuronal cultures leads to accumulation of unresolved aggregates of SQSTM1/p62 and phosphorylated TARDBP/TDP-43. However, C9orf72 reduction does not lead to major neuronal toxicity, suggesting that a second stress may be required to induce neuronal cell death. An intermediate size of polyglutamine repeats within ATXN2 is an important genetic modifier of ALS-FTD. We found that coexpression of intermediate polyglutamine repeats (30Q) of ATXN2 combined with C9orf72 depletion increases the aggregation of ATXN2 and neuronal toxicity. These results were confirmed in zebrafish embryos where partial C9orf72 knockdown along with intermediate (but not normal) repeat expansions in ATXN2 causes locomotion deficits and abnormal axonal projections from spinal motor neurons. These results demonstrate that C9orf72 plays an important role in the autophagy pathway while genetically interacting with another major genetic risk factor, ATXN2, to contribute to ALS-FTD pathogenesis.