Abstract Mutations in mitochondrial DNA encoded subunit of ATP synthase, MT-ATP6, are frequent causes of neurological mitochondrial diseases with a range of phenotypes from Leigh syndrome and NARP to ataxias and neuropathies. Here we investigated the functional consequences of an unusual heteroplasmic truncating mutation m.9154C>T in MT-ATP6, which caused peripheral neuropathy, ataxia and IgA nephropathy. ATP synthase not only generates cellular ATP, but its dimerization is required for mitochondrial cristae formation. Accordingly, the MT-ATP6 truncating mutation impaired the assembly of ATP synthase and disrupted cristae morphology, supporting our molecular dynamics simulations that predicted destabilized a/c subunit subcomplex. Next, we modeled the effects of the truncating mutation using patient-specific induced pluripotent stem cells. Unexpectedly, depending on mutation heteroplasmy level, the truncation showed multiple threshold effects in cellular reprogramming, neurogenesis and in metabolism of mature motor neurons (MN). Interestingly, MN differentiation beyond progenitor stage was impaired by Notch hyperactivation in the MT-ATP6 mutant, but not by rotenone-induced inhibition of mitochondrial respiration, suggesting that altered mitochondrial morphology contributed to Notch hyperactivation. Finally, we also identified a lower mutation threshold for a metabolic shift in mature MN, affecting lactate utilization, which may be relevant for understanding the mechanisms of mitochondrial involvement in peripheral motor neuropathies. These results establish a critical and disease-relevant role for ATP synthase in human cell fate decisions and neuronal metabolism.