Mutations in the progranulin (PGRN) gene have recently been identified in families with frontotemporal lobar degeneration and ubiquitin-positive brain inclusions linked to chromosome 17q21. We have previously described a Swedish family displaying frontotemporal dementia with rapid progression and linkage to chromosome 17q21. In this study, we performed an extended clinical and neuropathological investigation of affected members of the family and a genetic analysis of the PGRN gene. There was a large variation of the initial presenting symptoms in this family, but common clinical features were non-fluent aphasia and loss of spontaneous speech as well as personality and behavioural changes. Mean age at onset was 54 years with disease duration of close to 4 years. Neuropathological examination revealed frontotemporal neurodegeneration with ubiquitin and TAR DNA binding protein-43 immunoreactive intraneuronal inclusions. Mutation screening of the PGRN gene identified a 1 bp deletion in exon 1 causing a frameshift of the coding sequence and introducing a premature termination codon in exon 2 (Gly35GlufsX19). Analysis of PGRN messenger RNA (mRNA) levels revealed a considerable decrease in lymphoblasts from mutation carriers and fragment size separation, and sequence analysis confirmed that the mutated mRNA allele was almost absent in these samples. In conclusion, the PGRN Gly35fs mutation causes frontotemporal dementia with variable clinical presentation in a large Swedish family, most likely through nonsense-mediated decay of mutant PGRN mRNA and resulting haploinsufficiency.