Frontotemporal Dementia (FTD) is a neurodegenerative disease characterized by shrinkage of the frontal and temporal lobes of the brain. Clinical symptoms include changes in behavior and personality or problems with language. There are no drugs to stop FTD and the disease is invariably progressive and fatal. FTD has a strong genetic component and is often inherited in an autosomal dominant pattern. Mutations in the GRN gene, which encodes the progranulin (PGRN) protein, are one of the most common causes of FTD. PGRN is a secreted protein that is cleaved into its component granulin proteins (GRNs 1-7) through a poorly defined pathway. Multiple labs have found that PGRN is neuroprotective and deletion of the PGRN gene leads to marked brain inflammation. Because FTD-GRN mutations decrease PGRN levels by half, the loss of PGRN's protective function is thought to ultimately lead to dementia. Recent data indicate the protective functions of PGRN are mediated through the lysosome. The lysosome is an organelle critical for cell health and contains enzymes necessary to degrade and recycle proteins. Mutations and defects in lysosomal enzymes cause multiple human diseases often with neurodegeneration. However, the link between PGRN, GRNs, and the lysosome was unclear. We have discovered that PGRN is cleaved into GRNs in the lysosome and that these products are not just degradation products of PGRN. Rather GRNs appear to be critical units for maintaining the health of the lysosome and helping degrade many other proteins in the cell. Furthermore, a single GRN can rescue lysosomal defects caused by loss of PGRN in cell culture. Our data suggest the direct delivery of either PGRN or GRN-2 to lysosomes may be a viable therapeutic approach for treating FTD caused by GRN mutations. The proposed studies test this novel strategy to treat FTD-GRN which is fatal and currently untreatable.