Point mutations in cysteine string protein-α (CSPα) cause dominantly inherited adult-onset neuronal ceroid lipofuscinosis (ANCL), a rapidly progressing and lethal neurodegenerative disease with no treatment. ANCL mutations are proposed to trigger CSPα aggregation/oligomerization, but the mechanism of oligomer formation remains unclear. Here we use purified proteins, mouse primary neurons and patient-derived induced neurons to show that the normally palmitoylated cysteine string region of CSPα loses palmitoylation in ANCL mutants. This allows oligomerization of mutant CSPα via ectopic binding of iron-sulfur (Fe-S) clusters. The resulting oligomerization of mutant CSPα causes its mislocalization and consequent loss of its synaptic SNARE-chaperoning function. We then find that pharmacological iron chelation mitigates the oligomerization of mutant CSPα, accompanied by partial rescue of the downstream SNARE defects and the pathological hallmark of lipofuscin accumulation. Thus, the iron chelators deferiprone (L1) and deferoxamine (Dfx), which are already used to treat iron overload in humans, offer a new approach for treating ANCL.