Mutations in the charged multivesicular body protein 2B (CHMP2B) gene cause frontotemporal lobar degeneration. The mutations lead to C-terminal truncation of the CHMP2B protein. We generated Chmp2b knockout mice and transgenic mice expressing either wild-type or C-terminally truncated mutant CHMP2B. The transgenic CHMP2B mutant mice have decreased survival and show progressive neurodegenerative changes including gliosis and increasing accumulation of p62- and ubiquitin-positive inclusions. The inclusions are negative for the TAR DNA binding protein 43 and fused in sarcoma proteins, mimicking the inclusions observed in patients with CHMP2B mutation. Mice transgenic for mutant CHMP2B also develop an early and progressive axonopathy characterized by numerous amyloid precursor protein-positive axonal swellings, implicating altered axonal function in disease pathogenesis. These findings were not observed in Chmp2b knockout mice or in transgenic mice expressing wild-type CHMP2B, indicating that CHMP2B mutations induce degenerative changes through a gain of function mechanism. These data describe the first mouse model of dementia caused by CHMP2B mutation and provide new insights into the mechanisms of CHMP2B-induced neurodegeneration.