Members of the AAA+ superfamily of ATPases are involved in the unfolding of proteins and disassembly of protein complexes and aggregates. ATAD1 encoding the ATPase family, AAA+ domain containing 1-protein Thorase plays an important role in the function and integrity of mitochondria and peroxisomes. Postsynaptically, Thorase controls the internalization of excitatory, glutamatergic AMPA receptors by disassembling complexes between the AMPA receptor-binding protein, GRIP1, and the AMPA receptor subunit GluA2. Using whole-exome sequencing, we identified a homozygous frameshift mutation in the last exon of ATAD1 [c.1070_1071delAT; p.(His357Argfs*15)] in three siblings who presented with a severe, lethal encephalopathy associated with stiffness and arthrogryposis. Biochemical and cellular analyses show that the C-terminal end of Thorase mutant gained a novel function that strongly impacts its oligomeric state, reduces stability or expression of a set of Golgi, peroxisomal and mitochondrial proteins and affects disassembly of GluA2 and Thorase oligomer complexes. Atad1-/- neurons expressing Thorase mutantHis357Argfs*15 display reduced amount of GluA2 at the cell surface suggesting that the Thorase mutant may inhibit the recycling back and/or reinsertion of AMPA receptors to the plasma membrane. Taken together, our molecular and functional analyses identify an activating ATAD1 mutation as a new cause of severe encephalopathy and congenital stiffness.