Mutations in the human kinesin family member 5A (KIF5A) gene were recently identified as a genetic cause of amyotrophic lateral sclerosis (ALS). Several KIF5A ALS variants cause exon 27 skipping and are predicted to produce motor proteins with an altered C‐terminal tail (referred to as ΔExon27). However, the underlying pathogenic mechanism is still unknown. Here, we confirm the expression of KIF5A mutant proteins in patient iPSC‐derived motor neurons. We perform a comprehensive analysis of ΔExon27 at the single‐molecule, cellular, and organism levels. Our results show that ΔExon27 is prone to form cytoplasmic aggregates and is neurotoxic. The mutation relieves motor autoinhibition and increases motor self‐association, leading to drastically enhanced processivity on microtubules. Finally, ectopic expression of ΔExon27 in Drosophila melanogaster causes wing defects, motor impairment, paralysis, and premature death. Our results suggest gain‐of‐function as an underlying disease mechanism in KIF5A‐associated ALS.