Mutations in the RNA binding protein Fused in sarcoma (FUS) are estimated to account for 5-10% of all inherited cases of amyotrophic lateral sclerosis (ALS), but the function of FUS in motor neurons is poorly understood. Here, we investigate the early functional consequences of overexpressing wild-type or ALS-associated mutant FUS proteins in Drosophila motor neurons, and compare them to phenotypes arising from loss of the Drosophila homolog of FUS, Cabeza (Caz). We find that lethality and locomotor phenotypes correlate with levels of FUS transgene expression, indicating that toxicity in developing motor neurons is largely independent of ALS-linked mutations. At the neuromuscular junction (NMJ), overexpression of either wild-type or mutant FUS results in decreased number of presynaptic active zones and altered postsynaptic glutamate receptor subunit composition, coinciding with a reduction in synaptic transmission as a result of both reduced quantal size and quantal content. Interestingly, expression of human FUS downregulates endogenous Caz levels, demonstrating that FUS autoregulation occurs in motor neurons in vivo. However, loss of Caz from motor neurons increases synaptic transmission as a result of increased quantal size, suggesting that the loss of Caz in animals expressing FUS does not contribute to motor deficits. These data demonstrate that FUS/Caz regulates NMJ development and plays an evolutionarily conserved role in modulating the strength of synaptic transmission in motor neurons.