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Expanded GGGGCC (G 4 C 2 ) repeats in C9ORF72 cause amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). How RNAs containing expanded G 4 C 2 repeats are transcribed in human neurons is largely unknown. Here we describe a Drosophila model in which poly(GR) expression in adult neurons causes axonal and locomotor defects and premature death without apparent TDP-43 pathology. In an unbiased genetic screen, partial loss of Lilliputian (Lilli) activity strongly suppresses poly(GR) toxicity by specifically downregulating the transcription of GC-rich sequences in Drosophila. Knockout of AFF2/FMR2 (one of four mammalian homologues of Lilli) with CRISPR-Cas9 decreases the expression of the mutant C9ORF72 allele containing expanded G 4 C 2 repeats and the levels of repeat RNA foci and dipeptide repeat proteins in cortical neurons derived from induced pluripotent stem cells of C9ORF72 patients, resulting in rescue of axonal degeneration and TDP-43 pathology. Thus, AFF2/FMR2 regulates the transcription and toxicity of expanded G 4 C 2 repeats in human C9ORF72-ALS/FTD neurons.