Defects in the endosomal-lysosomal pathway have been implicated in a number of neurodegenerative disorders [1]. A key step in the endocytic regulation of transmembrane proteins occurs in a subset of late-endosomal compartments known as multivesicular bodies (MVBs), whose formation is controlled by endosomal sorting complex required for transport (ESCRT) [2, 3]. The roles of ESCRT in dendritic maintenance and neurodegeneration remain unknown. Here, we show that mSnf7-2, a key component of ESCRT-III, is highly expressed in most mammalian neurons. Loss of mSnf7-2 in mature cortical neurons caused retraction of dendrites and neuronal cell loss. mSnf7-2 binds to CHMP2B, another ESCRT-III subunit, in which a rare dominant mutation is associated with frontotemporal dementia linked to chromosome 3 (FTD3). Ectopic expression of the mutant protein CHMP2B^Intron5 also caused dendritic retraction prior to neurodegeneration. CHMP2B^Intron5 was associated more avidly than CHMP2B^WT with mSnf7-2, resulting in sequestration of mSnf7-2 in ubiquitin-positive late-endosomal vesicles in cortical neurons. Moreover, loss of mSnf7-2 or CHMP2B^Intron5 expression caused the accumulation of autophagosomes in cortical neurons and flies. These findings indicate that ESCRT-III dysfunction is associated with the autophagy pathway, suggesting a novel neurodegeneration mechanism that may have important implications for understanding FTD and other age-dependent neurodegenerative diseases.