Disrupted nucleocytoplasmic transport (NCT) has been implicated in neurodegenerative disease pathogenesis; however, the mechanisms by which disrupted NCT causes neurodegeneration remain unclear. In a Drosophila screen, we identified ref(2)P/p62, a key regulator of autophagy, as a potent suppressor of neurodegeneration caused by the GGGGCC hexanucleotide repeat expansion (G4C2 HRE) in C9orf72 that causes amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). We found that p62 is increased and forms ubiquitinated aggregates due to decreased autophagic cargo degradation. Immunofluorescence and electron microscopy of Drosophila tissues demonstrate an accumulation of lysosome-like organelles that precedes neurodegeneration. These phenotypes are partially caused by cytoplasmic mislocalization of Mitf/TFEB, a key transcriptional regulator of autophagolysosomal function. Additionally, TFEB is mislocalized and downregulated in human cells expressing GGGGCC repeats and in C9-ALS patient motor cortex. Our data suggest that the C9orf72-HRE impairs Mitf/TFEB nuclear import, thereby disrupting autophagy and exacerbating proteostasis defects in C9-ALS/FTD.