Motor neuron hyperexcitability is a broadly observed yet poorly understood feature of amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD). Nuclear depletion and cytoplasmic aggregation of the RNA splicing protein TAR DNA-binding protein 43 (TDP-43) are observed in most ALS and FTD patients. Here we show that TDP-43 dysfunction causes mis-splicing of KCNQ2, which encodes a voltage-gated potassium channel (Kv7.2) that regulates neuronal excitability. Using iPSC-derived neurons and postmortem ALS/FTD brain and spinal cord tissue we find widespread, disease-specific and TDP-43-specific skipping of an exon encoding the KCNQ2 pore domain. The mis-spliced mRNA escapes degradation and is translated into a nonfunctional protein with severely reduced ion conductance that aggregates in the endoplasmic reticulum and causes intrinsic hyperexcitability in ALS neuronal models. This event, which correlates with higher phosphorylated TDP-43 levels and earlier age of disease onset in patients, can be rescued by splice-modulating antisense oligonucleotides that dampen hyperexcitability in induced pluripotent stem cell cortical neurons and spinal motor neurons with TDP-43 depletion. Our work reveals that nuclear TDP-43 maintains the fidelity of KCNQ2 expression and function and provides a mechanistic link between established excitability disruption in ALS/FTD patients and TDP-43 dysfunction.