Topoisomerase II (TOP2) removes torsional stress from DNA and facilitates gene transcription by introducing transient DNA double-strand breaks (DSBs). Such DSBs are normally rejoined by TOP2 but on occasion can become abortive and remain unsealed. Here we identify homozygous mutations in the TDP2 gene encoding tyrosyl DNA phosphodiesterase-2, an enzyme that repairs 'abortive' TOP2-induced DSBs, in individuals with intellectual disability, seizures and ataxia. We show that cells from affected individuals are hypersensitive to TOP2-induced DSBs and that loss of TDP2 inhibits TOP2-dependent gene transcription in cultured human cells and in mouse post-mitotic neurons following abortive TOP2 activity. Notably, TDP2 is also required for normal levels of many gene transcripts in developing mouse brain, including numerous gene transcripts associated with neurological function and/or disease, and for normal interneuron density in mouse cerebellum. Collectively, these data implicate chromosome breakage by TOP2 as an endogenous threat to gene transcription and to normal neuronal development and maintenance.