Cytoplasmic accumulation and nuclear clearance of TDP-43 characterize familial and sporadic forms of amyotrophic lateral sclerosis and frontotemporal lobar degeneration, suggesting that either loss or gain of TDP-43 function, or both, cause disease formation. Here we have systematically compared loss- and gain-of-function of Drosophila TDP-43, TAR DNA Binding Protein Homolog (TBPH), in synaptic function and morphology, motor control, and age-related neuronal survival. Both loss and gain of TBPH severely affect development and result in premature lethality. TBPH dysfunction caused impaired synaptic transmission at the larval neuromuscular junction (NMJ) and in the adult. Tissue-specific knockdown together with electrophysiological recordings at the larval NMJ also revealed that alterations of TBPH function predominantly affect pre-synaptic efficacy, suggesting that impaired pre-synaptic transmission is one of the earliest events in TDP-43-related pathogenesis. Prolonged loss and gain of TBPH in adults resulted in synaptic defects and age-related, progressive degeneration of neurons involved in motor control. Toxic gain of TBPH did not downregulate or mislocalize its own expression, indicating that a dominant-negative effect leads to progressive neurodegeneration also seen with mutational inactivation of TBPH. Together these data suggest that dysfunction of Drosophila TDP-43 triggers a cascade of events leading to loss-of-function phenotypes whereby impaired synaptic transmission results in defective motor behavior and progressive deconstruction of neuronal connections, ultimately causing age-related neurodegeneration.