Human C2orf69 is an evolutionary-conserved gene whose function is unknown. Here, we report 9 children from 5 unrelated families with a fatal syndrome consisting of severe auto-inflammation, progredient leukoencephalopathy with recurrent seizures that segregate homozygous loss-of-function C2orf69 variants. C2ORF69 orthologues, which can be found in most eukaryotic genomes including that of unicellular phytoplanktons, bear homology to esterase enzymes. We find that human C2ORF69 is loosely bound to the mitochondrion and its depletion affects mitochondrial membrane potential in human fibroblasts and neurons. Moreover, we show that CRISPR/Cas9-inactivation of zebrafish C2orf69 results in lethality by 8 months of age due to spontaneous epileptic seizures which is accompanied by persistent brain inflammation. Collectively, our results delineate a novel auto-inflammatory Mendelian disorder of C2orf69 deficiency that disrupts the development/homeostasis of the immune and central nervous systems as demonstrated in patients and in a zebrafish model of the disease.