Lysosomal function of progranulin and neurodegeneration Mutations in the granulin (GRN) gene, resulting in haploinsufficiency of the progranulin (PGRN) protein, are a main cause of frontotemporal lobar degeneration (FTLD). PGRN is comprised of 7.5 granulin repeats and processed into individual granulin peptides in the lysosome. PGRN and granulin peptides are critical for proper lysosome activities and regulate many microglia mediated functions. However, how granulin peptides function in the lysosome is still unknown. Using our newly generated antibodies against individual granulins, we have shown that levels of individual granulin peptides can be differentially regulated. One granulin peptide, granulin E, interacts with CD68, a lysosomal membrane protein highly expressed in microglia. We have found that loss of CD68 specifically affects the levels of granulin E but no other granulins and PGRN deficiency leads to changes in CD68 levels and molecular weight, indicating that granulin E and CD68 regulate each other’s homeostasis in the lysosome. We have also discovered that PGRN interacts with alpha-N- acetylgalactosaminidase (NAGA), a lysosomal glycosidase, via the granulin F domain, and regulates NAGA activities. Based on these preliminary data, we hypothesize that individual granulin peptides have unique properties and functions in the lysosome through binding to specific lysosome protein(s). Three specific aims are proposed to further dissect the properties and function of granulin peptides in the lysosome. In Aim1, we will determine the processing and stability of individual granulin peptides, by measuring the levels and half- lives of individual granulins vs full length PGRN in neurons vs microglia, the two main cell types that express PGRN in the brain. Changes in the levels of individual granulins will be assayed during aging and neurodegeneration. The mechanism by which CD68 regulates the levels of granulin E will be elucidated. In Aim2, we will dissect the functions of individual granulins in the lysosome. The mechanisms by which granulin peptides E and F regulate CD68 and NAGA functions will be investigated, respectively. Binding partners for other granulin peptides will be identified through proteomic screens and characterized. In Aim 3, we will investigate the role of granulins in maintaining lysosomal membrane integrity and the transcriptional program involved in microglial activation upon PGRN loss, since we have found that PGRN deficiency leads to impaired lysosomal membrane integrity and enhanced expression of lysosomal proteins and inflammation markers in microglia. The proposed studies will shed light on the physiological functions of granulin peptides in the lysosome and the connection between lysosomal dysfunction and microglial activation. Our work will also facilitate therapeutic development for FTLD and other devastating neurodegenerative diseases.