Expansion of G4C2 repeats within the C9ORF72 gene is the most common cause of amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). Such repeats lead to decreased expression of the autophagy regulator C9ORF72 protein. Furthermore, sense and antisense repeats are translated into toxic dipeptide repeat (DPR) proteins. It is unclear how these repeats are translated, and in which way their translation and the reduced expression of C9ORF72 modulate repeat toxicity. Here, we found that sense and antisense repeats are translated upon initiation at canonical AUG or near‐cognate start codons, resulting in polyGA‐, polyPG‐, and to a lesser degree polyGR‐DPR proteins. However, accumulation of these proteins is prevented by autophagy. Importantly, reduced C9ORF72 levels lead to suboptimal autophagy, thereby impairing clearance of DPR proteins and causing their toxic accumulation, ultimately resulting in neuronal cell death. Of clinical importance, pharmacological compounds activating autophagy can prevent neuronal cell death caused by DPR proteins accumulation. These results suggest the existence of a double‐hit pathogenic mechanism in ALS/FTD, whereby reduced expression of C9ORF72 synergizes with DPR protein accumulation and toxicity.