We report an early-onset autosomal-recessive neurological disease with cerebellar atrophy and lysosomal dysfunction. We identified bi-allelic loss-of-function (LoF) variants in Oxidative Resistance 1 (OXR1) in five individuals from three families; these individuals presented with a history of severe global developmental delay, current intellectual disability, language delay, cerebellar atrophy, and seizures. While OXR1 is known to play a role in oxidative stress resistance, its molecular functions are not well established. OXR1 contains three conserved domains: LysM, GRAM, and TLDc. The gene encodes at least six transcripts, including some that only consist of the C-terminal TLDc domain. We utilized Drosophila to assess the phenotypes associated with loss of mustard (mtd), the fly homolog of OXR1. Strong LoF mutants exhibit late pupal lethality or pupal eclosion defects. Interestingly, although mtd encodes 26 transcripts, severe LoF and null mutations can be rescued by a single short human OXR1 cDNA that only contains the TLDc domain. Similar rescue is observed with the TLDc domain of NCOA7, another human homolog of mtd. Loss of mtd in neurons leads to massive cell loss, early death, and an accumulation of aberrant lysosomal structures, similar to what we observe in fibroblasts of affected individuals. Our data indicate that mtd and OXR1 are required for proper lysosomal function; this is consistent with observations that NCOA7 is required for lysosomal acidification.