Spinocerebellar ataxia type 5 (SCA5) is an autosomal dominant neurodegenerative disorder caused by mutations in the SPBTN2 gene encoding beta-III-spectrin. To investigate the molecular basis of SCA5, we established a series of transgenic Drosophila models that express human beta-III-spectrin or fly beta-spectrin proteins containing SCA5 mutations. Expression of the SCA5 mutant spectrin in the eye causes a progressive neurodegenerative phenotype, and expression in larval neurons results in posterior paralysis, reduced synaptic terminal growth, and axonal transport deficits. These phenotypes are genetically enhanced by both dynein and dynactin loss-of-function mutations. In summary, we demonstrate that SCA5 mutant spectrin causes adult-onset neurodegeneration in the fly eye and disrupts fundamental intracellular transport processes that are likely to contribute to this progressive neurodegenerative disease.