Pathogenic variation in MAPT, GRN, and C9ORF72 accounts for at most only half of frontotemporal lobar degeneration (FTLD) cases with a family history of neurological disease. This suggests additional variants and genes that remain to be identified as risk factors for FTLD. We conducted a case–control genetic association study comparing pathologically diagnosed FTLD patients (n = 94) to cognitively normal older adults (n = 3541), and found suggestive evidence that gene-wide aggregate rare variant burden in MFSD8 is associated with FTLD risk. Because homozygous mutations in MFSD8 cause neuronal ceroid lipofuscinosis (NCL), similar to homozygous mutations in GRN, we assessed rare variants in MFSD8 for relevance to FTLD through experimental follow-up studies. Using post-mortem tissue from middle frontal gyrus of patients with FTLD and controls, we identified increased MFSD8 protein levels in MFSD8 rare variant carriers relative to non-variant carrier patients with sporadic FTLD and healthy controls. We also observed an increase in lysosomal and autophagy-related proteins in MFSD8 rare variant carrier and sporadic FTLD patients relative to controls. Immunohistochemical analysis revealed that MFSD8 was expressed in neurons and astrocytes across subjects, without clear evidence of abnormal localization in patients. Finally, in vitro studies identified marked disruption of lysosomal function in cells from MFSD8 rare variant carriers, and identified one rare variant that significantly increased the cell surface levels of MFSD8. Considering the growing evidence for altered autophagy in the pathogenesis of neurodegenerative disorders, our findings support a role of NCL genes in FTLD risk and suggest that MFSD8-associated lysosomal dysfunction may contribute to FTLD pathology.