Amyotrophic Lateral Sclerosis (ALS) presents with focal muscle weakness due to motor neurone degeneration that becomes generalised, leading to death from respiratory failure within 3-5 years from symptom onset. Despite the heterogeneity of etiology, TDP-43 proteinopathy is a common pathological feature that is observed in >95% of ALS and tau-negative Frontotemporal Dementia (FTD) cases. TDP-43 is a DNA/RNA-binding protein that in ALS and FTD translocates from being predominantly nuclear to form detergent-resistant, hyperphosphorylated aggregates in the cytoplasm of affected neurones and glia. Mutations in TARDBP account for 1-4% of all ALS cases and almost all arise in the low complexity C-terminal domain that does not affect RNA binding and processing. Here we report an ALS/FTD kindred with a novel K181E TDP-43 mutation that is located in close proximity to the RRM1 domain. In order to offer predictive gene testing to at risk family members we undertook a series of functional studies to characterise the properties of the mutation. Spectroscopy studies of the K181E protein revealed no evidence of significant misfolding. Although it is unable to bind to or splice RNA, it forms abundant aggregates in transfected cells. We extended our study to include other ALS-linked mutations adjacent to the RRM domains that also disrupt RNA binding and greatly enhance TDP-43 aggregation, forming detergent-resistant and hyperphosphorylated inclusions. Lastly, we demonstrate that K181E binds to, and sequesters, wild type TDP-43 within nuclear and cytoplasmic inclusions. Thus, we demonstrate that TDP-43 mutations that disrupt RNA binding greatly enhance aggregation and are likely to be pathogenic as they promote wild-type TDP-43 to mislocalise and aggregate acting in a dominant-negative manner. This study highlights the importance of RNA binding to maintain TDP-43 solubility and the role of TDP-43 aggregation in disease pathogenesis.