Genetic variation at the transmembrane protein 106B gene (TMEM106B) has been linked to risk of frontotemporal lobar degeneration with TDP-43 inclusions (FTLD-TDP) through an unknown mechanism. We found that presence of the TMEM106B rs3173615 protective genotype was associated with longer survival after symptom onset in a postmortem FTLD-TDP cohort, suggesting a slower disease course. The seminal discovery that filaments derived from TMEM106B is a common feature in aging and, across a range of neurodegenerative disorders, suggests that genetic variants in TMEM106B could modulate disease risk and progression through modulating TMEM106B aggregation. To explore this possibility and assess the pathological relevance of TMEM106B accumulation, we generated a new antibody targeting the TMEM106B filament core sequence. Analysis of postmortem samples revealed that the TMEM106B rs3173615 risk allele was associated with higher TMEM106B core accumulation in patients with FTLD-TDP. In contrast, minimal TMEM106B core deposition was detected in carriers of the protective allele. Although the abundance of monomeric full-length TMEM106B was unchanged, carriers of the protective genotype exhibited an increase in dimeric full-length TMEM106B. Increased TMEM106B core deposition was also associated with enhanced TDP-43 dysfunction, and interactome data suggested a role for TMEM106B core filaments in impaired RNA transport, local translation, and endolysosomal function in FTLD-TDP. Overall, these findings suggest that prevention of TMEM106B core accumulation is central to the mechanism by which the TMEM106B protective haplotype reduces disease risk and slows progression.