Frontotemporal lobar degeneration (FTLD) with inclusion body myopathy and Paget disease of bone is a rare, autosomal dominant disorder caused by mutations in the VCP (valosin-containing protein) gene. The disease is characterized neuropathologically by frontal and temporal lobar atrophy, neuron loss and gliosis, and ubiquitin-positive inclusions (FTLD-U), which are distinct from those seen in other sporadic and familial FTLD-U entities. The major component of the ubiquitinated inclusions of FTLD with VCP mutation is TDP-43 (TAR DNA-binding protein of 43 kDa). TDP-43 proteinopathy links sporadic amyotrophic lateral sclerosis, sporadic FTLD-U, and most familial forms of FTLD-U. Understanding the relationship between individual gene defects and pathologic TDP-43 will facilitate the characterization of the mechanisms leading to neurodegeneration. Using cell culture models, we have investigated the role of mutant VCP in intracellular trafficking, proteasomal function, and cell death and demonstrate that mutations in the VCP gene 1) alter localization of TDP-43 between the nucleus and cytosol, 2) decrease proteasome activity, 3) induce endoplasmic reticulum stress, 4) increase markers of apoptosis, and 5) impair cell viability. These results suggest that VCP mutation-induced neurodegeneration is mediated by several mechanisms.