In addition to being energy generators, mitochondria control many cellular processes including apoptosis. They are dynamic organelles, and the machinery of membrane fusion and fission is emerging as a key regulator of mitochondrial biology. We have recently identified a novel and conserved mitochondrial rhomboid intramembrane protease that controls membrane fusion in Saccharomyces cerevisiae by processing the dynamin-like GTPase, Mgm1, thereby releasing it from the membrane. The genetics of mitochondrial membrane dynamics has until now focused primarily on yeast. Here we show that in Drosophila, the mitochondrial rhomboid (Rhomboid-7) is required for mitochondrial fusion during fly spermatogenesis and muscle maturation, both tissues with unusual mitochondrial dynamics. We also find that mutations in Drosophila optic atrophy 1-like (Opa1-like), the ortholog of yeast mgm1, display similar phenotypes, suggesting a shared role for Rhomboid-7 and Opa1-like, as with their yeast orthologs. Loss of human OPA1 leads to dominant optic atrophy, a mitochondrial disease leading to childhood onset blindness. rhomboid-7 mutant flies have severe neurological defects, evidenced by compromised signaling across the first visual synapse, as well as light-induced neurodegeneration of photoreceptors that resembles the human disease. rhomboid-7 mutant flies also have a greatly reduced lifespan.