Transmembrane protein 106B (TMEM106B), which is a type II transmembrane protein, is believed to be involved in intracellular dynamics and morphogenesis in the lysosome. TMEM106B is known to be a risk factor for frontotemporal lobar degeneration and has been recently identified as the receptor needed for the entry of SARS-CoV-2, independently of angiotensin-converting enzyme 2 (ACE2). A missense mutation, p.Asp252Asn, of TMEM106B is associated with hypomyelinating leukodystrophy 16 (HLD16), which is an oligodendroglial cell-related white matter disorder causing thin myelin sheaths or myelin deficiency in the central nervous system (CNS). However, it remains to be elucidated how the mutated TMEM106B affects oligodendroglial cells. Here, we show that the TMEM106B mutant protein fails to exhibit lysosome distribution in the FBD-102b cell line, an oligodendroglial precursor cell line undergoing differentiation. In contrast, wild-type TMEM106B was indeed localized in the lysosome. Cells harboring wild-type TMEM106B differentiated into ones with widespread membranes, whereas cells harboring mutated TMEM106B failed to differentiate. It is of note that the output of signaling through the lysosome-resident mechanistic target of rapamycin (mTOR) was greatly decreased in cells harboring mutated TMEM106B. Furthermore, treatment with hesperetin, a citrus flavonoid known as an activator of mTOR signaling, restored the molecular and cellular phenotypes induced by the TMEM106B mutant protein. These findings suggest the potential pathological mechanisms underlying HLD16 and their amelioration.