Frontotemporal dementia (FTD) with ubiquitin-immunoreactive neuronal inclusions (both cytoplasmic and nuclear) of unknown nature has been linked to a chromosome 17q21 region (FTDU-17) containing MAPT (microtubule-associated protein tau). FTDU-17 patients have consistently been shown to lack a tau-immunoreactive pathology, a feature characteristic of FTD with parkinsonism linked to mutations in MAPT (FTDP-17). Furthermore, in FTDU-17 patients, mutations in MAPT and genomic rearrangements in the MAPT region have been excluded by both genomic sequencing and fluorescence in situ hybridization on mechanically stretched chromosomes. Here we demonstrate that FTDU-17 is caused by mutations in the gene coding for progranulin (PGRN), a growth factor involved in multiple physiological and pathological processes including tumorigenesis. Besides the production of truncated PGRN proteins due to premature stop codons, we identified a mutation within the splice donor site of intron 0 (IVS0 + 5G > C), indicating loss of the mutant transcript by nuclear degradation. The finding was made within an extensively documented Belgian FTDU-17 founder family. Transcript and protein analyses confirmed the absence of the mutant allele and a reduction in the expression of PGRN. We also identified a mutation (c.3G > A) in the Met1 translation initiation codon, indicating loss of PGRN due to lack of translation of the mutant allele. Our data provide evidence that PGRN haploinsufficiency leads to neurodegeneration because of reduced PGRN-mediated neuronal survival. Furthermore, in a Belgian series of familial FTD patients, PGRN mutations were 3.5 times more frequent than mutations in MAPT, underscoring a principal involvement of PGRN in FTD pathogenesis.