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Amyotrophic lateral sclerosis (ALS) is an uncommon neurodegenerative disease caused by degeneration of upper and lower motor neurons. Several genes, including SOD1, TDP-43, FUS, Ubiquilin 2, C9orf72 and Profilin 1, have been linked with the sporadic and familiar forms of ALS. FUS is a DNA/RNA-binding protein (RBP) that forms cytoplasmic inclusions in ALS and frontotemporal lobular degeneration (FTLD) patients' brains and spinal cords. However, it is unknown whether the RNA-binding ability of FUS is required for causing ALS pathogenesis. Here, we exploited a Drosophila model of ALS and neuronal cell lines to elucidate the role of the RNA-binding ability of FUS in regulating FUS-mediated toxicity, cytoplasmic mislocalization and incorporation into stress granules (SGs). To determine the role of the RNA-binding ability of FUS in ALS, we mutated FUS RNA-binding sites (F305L, F341L, F359L, F368L) and generated RNA-binding-incompetent FUS mutants with and without ALS-causing mutations (R518K or R521C). We found that mutating the aforementioned four phenylalanine (F) amino acids to leucines (L) (4F-L) eliminates FUS RNA binding. We observed that these RNA-binding mutations block neurodegenerative phenotypes seen in the fly brains, eyes and motor neurons compared with the expression of RNA-binding-competent FUS carrying ALS-causing mutations. Interestingly, RNA-binding-deficient FUS strongly localized to the nucleus of Drosophila motor neurons and mammalian neuronal cells, whereas FUS carrying ALS-linked mutations was distributed to the nucleus and cytoplasm. Importantly, we determined that incorporation of mutant FUS into the SG compartment is dependent on the RNA-binding ability of FUS. In summary, we demonstrate that the RNA-binding ability of FUS is essential for the neurodegenerative phenotype in vivo of mutant FUS (either through direct contact with RNA or through interactions with other RBPs).