Hexanucleotide repeat expansions in C9orf72 are the most common cause of familial amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). The mechanisms by which the expansions cause disease are not properly understood but a favoured route involves its translation into dipeptide repeat (DPR) polypeptides, some of which are neurotoxic. However, the precise targets for mutant C9orf72 and DPR toxicity are not fully clear, and damage to several neuronal functions has been described. Many of these functions are regulated by signalling between the endoplasmic reticulum (ER) and mitochondria. ER-mitochondria signalling requires close physical contacts between the two organelles that are mediated by the VAPB-PTPIP51 'tethering' proteins. Here, we show that ER-mitochondria signalling and the VAPB-PTPIP51 tethers are disrupted in neurons derived from induced pluripotent stem (iPS) cells from patients carrying ALS/FTD pathogenic C9orf72 expansions and in affected neurons in mutant C9orf72 transgenic mice. In these mice, disruption of the VAPB-PTPIP51 tethers occurs prior to disease onset suggesting that it contributes to the pathogenic process. We also show that neurotoxic DPRs disrupt the VAPB-PTPIP51 interaction and ER-mitochondria contacts and that this may involve activation of glycogen synthase kinases-3β (GSK3β), a known negative regulator of VAPB-PTPIP51 binding. Finally, we show that these DPRs disrupt delivery of Ca2+ from ER stores to mitochondria, which is a primary function of the VAPB-PTPIP51 tethers. This delivery regulates a number of key neuronal functions that are damaged in ALS/FTD including bioenergetics, autophagy and synaptic function. Our findings reveal a new molecular target for mutant C9orf72-mediated toxicity.