In amyotrophic lateral sclerosis (ALS) motor neurons (MNs) undergo dying-back, where the distal axon degenerates before the soma. The hexanucleotide repeat expansion (HRE) in C9ORF72 is the most common genetic cause of ALS, but the mechanism of pathogenesis is largely unknown with both gain- and loss-of-function mechanisms being proposed. To better understand C9ORF72-ALS pathogenesis, we generated isogenic induced pluripotent stem cells. MNs with HRE in C9ORF72 showed decreased axonal trafficking compared with gene corrected MNs. However, knocking out C9ORF72 did not recapitulate these changes in MNs from healthy controls, suggesting a gain-of-function mechanism. In contrast, knocking out C9ORF72 in MNs with HRE exacerbated axonal trafficking defects and increased apoptosis as well as decreased levels of HSP70 and HSP40, and inhibition of HSPs exacerbated ALS phenotypes in MNs with HRE. Therefore, we propose that the HRE in C9ORF72 induces ALS pathogenesis via a combination of gain- and loss-of-function mechanisms. Sterneckert and colleagues generated isogenic induced pluripotent stem cell lines and demonstrated that MNs with hexanucleotide repeat expansion (HRE) in C9ORF72 show reduced axonal trafficking, which is not recapitulated by knocking out C9ORF72 in MNs from healthy individuals. In contrast, knocking out C9ORF72 exacerbated phenotypes in MNs with HRE, suggesting that both gain- and loss-of-function mechanisms contribute to C9ORF72-ALS.