Various neurodegenerative disorders are associated with human NTE/PNPLA6 dysfunction. Mechanisms of neuropathogenesis in these diseases are far from clearly elucidated. Hereditary spastic paraplegia belongs to a type of neurodegeneration associated with NTE/PNLPLA6 and is implicated in neuron death. In this study, we used Drosophila melanogaster to investigate the consequences of neuronal knockdown of swiss cheese (sws)—the evolutionarily conserved ortholog of human NTE/PNPLA6—in vivo. Adult flies with the knockdown show longevity decline, locomotor and memory deficits, severe neurodegeneration progression in the brain, reactive oxygen species level acceleration, mitochondria abnormalities and lipid droplet accumulation. Our results suggest that SWS/NTE/PNPLA6 dysfunction in neurons induces oxidative stress and lipid metabolism alterations, involving mitochondria dynamics and lipid droplet turnover in neurodegeneration pathogenesis. We propose that there is a complex mechanism in neurological diseases such as hereditary spastic paraplegia, which includes a stress reaction, engaging mitochondria, lipid droplets and endoplasmic reticulum interplay.