The sigma 1 receptor (σ1R) is a unique endoplasmic reticulum membrane protein. Its ligands have been shown to possess therapeutic potential for neurological and substance use disorders among others. The E102Q mutation of σ1R has been found to elicit familial cases of amyotrophic lateral sclerosis (ALS). Despite reports of its downstream signaling consequences, the mechanistic details of the functional impact of E102Q at molecular level are not clear. Here, we investigate the molecular mechanism of the E102Q mutation with a spectrum of biochemical, biophysical, and pharmacological approaches. Our analysis of the interaction network of σ1R indicates that a set of residues near E102 is critical for the integrity of C-terminal ligand-binding domain. However, this integrity is not affected by the E102Q and E102A mutations, which is confirmed by the radioligand binding results. Instead, the E102 mutations disrupt the connection between the C-terminal domain and the N-terminal transmembrane helix (NT-helix). Results from bioluminescence resonance energy transfer and western blot assays demonstrate that these mutations destabilize higher-order σ1R oligomers, while our molecular dynamics simulations based on a σ1R crystal structure reveal a potential mechanism by which the mutations perturb the NT-helix dynamics. Thus, we propose that E102 is at a critical position in propagating the effects of ligand binding from the C-terminal domain to the NT-helix, while the latter may be involved in forming alternative oligomer interfaces, separate from the previously reported trimer interface. Together, these results provide the first account of the molecular mechanism of σ1R dysfunction caused by E102Q.