Adrenoleukodystrophy is a neurometabolic disorder caused by a defective peroxisomal ABCD1 transporter of very long-chain fatty acids (VLCFAs). Its pathogenesis is incompletely understood. Here we characterize a nematode model of X-ALD with loss of the pmp-4 gene, the worm orthologue of ABCD1. These mutants recapitulate the hallmarks of X-ALD: i) VLCFAs accumulation and impaired mitochondrial redox homeostasis and ii) axonal damage coupled to locomotor dysfunction. Furthermore, we identify a novel role for PMP-4 in modulating lipid droplet dynamics. Importantly, we show that the mitochondria targeted antioxidant MitoQ normalizes lipid droplets size, and prevents axonal degeneration and locomotor disability, highlighting its therapeutic potential. Moreover, PMP-4 acting solely in the hypodermis rescues axonal and locomotion abnormalities, suggesting a myelin-like role for the hypodermis in providing essential peroxisomal functions for the nematode nervous system.