Friedreich’s ataxia (FRDA) is the most important recessive ataxia in the Caucasian population. It is caused by a deficit of the mitochondrial protein frataxin. Despite its pivotal effect on biosynthesis of iron-sulfur clusters and mitochondrial energy production, little is known about the influence of frataxin depletion on homeostasis of the cellular mitochondrial network. We have carried out a forward genetic screen to analyze genetic interactions between genes controlling mitochondrial homeostasis and Drosophila frataxin. Our screen has identified silencing of Drosophila mitofusin (Marf) as a suppressor of FRDA phenotypes in glia. Drosophila Marf is known to play crucial roles in mitochondrial fusion, mitochondrial degradation and in the interface between mitochondria and endoplasmic reticulum (ER). Thus, we have analyzed the effects of frataxin knockdown on mitochondrial morphology, mitophagy and ER function in our fly FRDA model using different histological and molecular markers such as tetramethylrhodamine, ethyl ester (TMRE), mitochondria-targeted GFP (mitoGFP), p62, ATG8a, LAMP1, Xbp1 and BiP/GRP78. Furthermore, we have generated the first Drosophila transgenic line containing the mtRosella construct under the UAS control to study the progression of the mitophagy process in vivo. Our results indicated that frataxin-deficiency had a small impact on mitochondrial morphology but enhanced mitochondrial clearance and altered the ER stress response in Drosophila. Remarkably, we demonstrate that downregulation of Marf suppresses ER stress in frataxin-deficient cells and this is sufficient to improve locomotor dysfunction, brain degeneration and lipid dyshomeostasis in our FRDA model. In agreement, chemical reduction of ER stress by means of two different compounds was sufficient to ameliorate the effects of frataxin deficiency in three different fly FRDA models. Altogether, our results strongly suggest that the protection mediated by Marf knockdown in glia is mainly linked to its role in the mitochondrial-ER tethering and not to mitochondrial dynamics or mitochondrial degradation and that ER stress is a novel and pivotal player in the progression and etiology of FRDA. This work might define a new pathological mechanism in FRDA, linking mitochondrial dysfunction due to frataxin deficiency and mitofusin-mediated ER stress, which might be responsible for characteristic cellular features of the disease and also suggests ER stress as a therapeutic target.