Sanfilippo syndrome (Mucopolysaccharidosis type III or MPS III) is a recessively inherited neurodegenerative lysosomal storage disorder. Mutations in genes encoding enzymes in the heparan sulphate degradation pathway lead to the accumulation of partially degraded heparan sulphate, resulting ultimately in the development of neurological deficits. Mutations in the gene encoding the membrane protein heparan‐α‐glucosaminide N‐acetyltransferase (HGSNAT; EC2.3.1.78) cause MPS IIIC (OMIM#252930), typified by impaired cognition, sleep–wake cycle changes, hyperactivity and early death, often before adulthood. The precise disease mechanism that causes symptom emergence remains unknown, posing a significant challenge in the development of effective therapeutics. As HGSNAT is conserved in Drosophila melanogaster, we now describe the creation and characterisation of the first Drosophila models of MPS IIIC. Flies with either an endogenous insertion mutation or RNAi‐mediated knockdown of hgsnat were confirmed to have a reduced level of HGSNAT transcripts and age‐dependent accumulation of heparan sulphate leading to engorgement of the endo/lysosomal compartment. This resulted in abnormalities at the pre‐synapse, defective climbing and reduced overall activity. Altered circadian rhythms (shift in peak morning activity) were seen in hgsnat neuronal knockdown lines. Further, when hgsnat was knocked down in specific glial subsets (wrapping, cortical, astrocytes or subperineural glia), impaired climbing or reduced activity was noted, implying that hgsnat function in these specific glial subtypes contributes significantly to this behaviour and targeting treatments to these cell groups may be necessary to ameliorate or prevent symptom onset. These novel models of MPS IIIC provide critical research tools for delineating the key cellular pathways causal in the onset of neurodegeneration in this presently untreatable disorder.