Microsatellite expansions are the leading cause of numerous neurodegenerative disorders. Here we demonstrate that GGGGCC and CAG microsatellite repeat RNAs associated with C9orf72 in ALS/FTD and with polyglutamine diseases, respectively, localize to neuritic granules that undergo active transport into distal neuritic segments. In cultured mammalian spinal cord neurons, the presence of neuritic GGGGCC repeat RNA correlates with neuronal branching defects and the repeat RNA localizes to granules that label with FMRP, a transport granule component. Using a Drosophila GGGGCC expansion disease model, we characterize dendritic branching defects that are modulated by FMRP and Orb2. The human orthologues of these modifiers are misregulated in induced pluripotent stem cell-differentiated neurons from GGGGCC expansion carriers. These data suggest that expanded repeat RNAs interact with the mRNA transport and translation machinery, causing transport granule dysfunction. This could be a novel mechanism contributing to the neuronal defects associated with C9orf72 and other microsatellite expansion diseases.