White matter hyperintensities (WMH) are often seen on MRI brain scans in frontotemporal dementia (FTD) due to progranulin (GRN) mutations, but their pathological correlates are unknown. We examined the histological changes underlying WMH in a patient with GRN mutation associated behavioral variant FTD. In vivo and cadaveric MRI showed progressive, asymmetric frontotemporal and parietal atrophy, and asymmetrical WMH predominantly affecting frontal mid-zones. We first performed segmentation and localization analyses of WMH present on cadaveric MRI FLAIR images, then selected five different brain regions directly matched to differing severities of WMH for histological analysis. We used immunohistochemistry to assess vascular pathology, degree of spongiosis, neuronal and axonal loss, TDP-43, demyelination and astrogliosis, and microglial burden and morphology. Brain regions with significant WMH displayed severe cortical and white matter pathology, and prominent white matter microglial activation and microglial dystrophy, but only mild axonal loss and minimal vascular pathology. Our study suggests that WMH in GRN mutation carriers are not secondary to vascular pathology. Whilst cortical pathology induced axonal degeneration could contribute to white matter damage, individuals with GRN mutations could develop selective white matter vulnerability and myelin loss due to chronic, regional microglial dysfunction arising from GRN haploinsufficiency.