Mutations in fused in sarcoma (FUS) lead to amyotrophic lateral sclerosis (ALS) with varying ages of onset, progression and severity. This suggests that unknown genetic factors contribute to disease pathogenesis. Here we show the identification of muscleblind as a novel modifier of FUS-mediated neurodegeneration in vivo. Muscleblind regulates cytoplasmic mislocalization of mutant FUS and subsequent accumulation in stress granules, dendritic morphology and toxicity in mammalian neuronal and human iPSC-derived neurons. Interestingly, genetic modulation of endogenous muscleblind was sufficient to restore survival motor neuron (SMN) protein localization in neurons expressing pathogenic mutations in FUS, suggesting a potential mode of suppression of FUS toxicity. Upregulation of SMN suppressed FUS toxicity in Drosophila and primary cortical neurons, indicating a link between FUS and SMN. Our data provide in vivo evidence that muscleblind is a dominant modifier of FUS-mediated neurodegeneration by regulating FUS-mediated ALS pathogenesis.