Progranulin haplo-insufficiency is a main cause of frontotemporal lobar degeneration (FTLD) with TDP-43 aggregates. Previous studies have shown that sortilin regulates progranulin trafficking and is a main determinant of progranulin level in the brain. In this study, we mapped the binding site between progranulin and sortilin. Progranulin binds to the beta-propeller region of sortilin through its C-terminal tail. The C-terminal progranulin fragment is fully sufficient for sortilin binding and progranulin C-terminal peptide displaces progranulin binding to sortilin. Deletion of the last 3 residues of progranulin (QLL) abolishes its binding to sortilin and also sortilin dependent regulation of progranulin trafficking. Since progranulin haplo-insufficiency results in FTLD, these results may provide important insights into future studies of progranulin trafficking and signaling and progranulin based therapy for FTLD.