Loss-of-function mutations in progranulin (GRN) cause ubiquitin- and TAR DNA-binding protein 43 (TDP-43)-positive frontotemporal dementia (FTLD-U), a progressive neurodegenerative disease affecting ∼10% of early-onset dementia patients. Here we expand the role of GRN in FTLD-U and demonstrate that a common genetic variant (rs5848), located in the 3′-untranslated region (UTR) of GRN in a binding-site for miR-659, is a major susceptibility factor for FTLD-U. In a series of pathologically confirmed FTLD-U patients without GRN mutations, we show that carriers homozygous for the T-allele of rs5848 have a 3.2-fold increased risk to develop FTLD-U compared with homozygous C-allele carriers (95% CI: 1.50–6.73). We further demonstrate that miR-659 can regulate GRN expression in vitro, with miR-659 binding more efficiently to the high risk T-allele of rs5848 resulting in augmented translational inhibition of GRN. A significant reduction in GRN protein was observed in homozygous T-allele carriers in vivo, through biochemical and immunohistochemical methods, mimicking the effect of heterozygous loss-of-function GRN mutations. In support of these findings, the neuropathology of homozygous rs5848 T-allele carriers frequently resembled the pathological FTLD-U subtype of GRN mutation carriers. We suggest that the expression of GRN is regulated by miRNAs and that common genetic variability in a miRNA binding-site can significantly increase the risk for FTLD-U. Translational regulation by miRNAs may represent a common mechanism underlying complex neurodegenerative disorders.