The most common genetic cause of amyotrophic lateral sclerosis (ALS) is a GGGGCC (G4C2) hexanucleotide repeat expansions in first intron of the C9orf72 gene. The accumulation of repetitive RNA sequences can mediate toxicity potentially through the formation of intranuclear RNA foci that sequester key RNA-binding proteins (RBPs), and non-ATG mediated translation into toxic dipeptide protein repeats. However, the contribution of RBP sequestration to the mechanisms underlying RNA-mediated toxicity remain unknown. Here we show that the ALS-associated RNA-binding protein, Matrin-3 (MATR3), colocalizes with G4C2 RNA foci in patient tissues as well as iPSC-derived motor neurons harboring the C9orf72 mutation. Hyperexpansion of C9 repeats perturbed subcellular distribution and levels of endogenous MATR3 in C9-ALS patient-derived motor neurons. Interestingly, we observed that ectopic expression of human MATR3 strongly mitigates G4C2-mediated neurodegeneration in vivo. MATR3-mediated suppression of C9 toxicity was dependent on the RNA-binding domain of MATR3. Importantly, we found that expression of MATR3 reduced the levels of RAN-translation products in mammalian cells in an RNA-dependent manner. Finally, we have shown that knocking down endogenous MATR3 in C9-ALS patient-derived iPSC neurons decreased the presence of G4C2 RNA foci in the nucleus. Overall, these studies suggest that MATR3 genetically modifies the neuropathological and the pathobiology of C9orf72 ALS through modulating the RNA foci and RAN translation.