Recent evidence links dysfunctional lipid metabolism to the pathogenesis of Parkinson's disease, but the mechanisms are not resolved. Here, we created a new Drosophila knock-in model of DNAJC6/Auxilin and find that the pathogenic mutation causes synaptic dysfunction, neurological defects and neurodegeneration, as well as specific lipid metabolism alterations. In these mutants membrane lipids containing long-chain polyunsaturated fatty acids, including phosphatidylinositol lipid species that are key for synaptic vesicle recycling and organelle function are reduced. Overexpression of another protein mutated in Parkinson's disease, Synaptojanin-1, known to bind and synthesize specific phosphoinositides, strongly rescues the DNAJC6/Auxilin neuronal defects and neurodegeneration. Our work reveals a functional relation between two proteins mutated in Parkinson's disease and implicates deregulated phosphoinositide metabolism in the maintenance of neuronal integrity and neuronal survival in Parkinsonism.