Amyotrophic lateral sclerosis (ALS) and frontotemporal dementia (FTD) comprise a spectrum of neurodegenerative diseases linked to TDP-43 proteinopathy, which at the cellular level, is characterized by loss of nuclear TDP-43 and accumulation of cytoplasmic TDP-43 inclusions that ultimately cause RNA processing defects including dysregulation of splicing, mRNA transport and translation. Complementing our previous work in motor neurons, here we report a novel model of TDP-43 proteinopathy based on overexpression of TDP-43 in a subset of Drosophila Kenyon cells of the mushroom body (MB), a circuit with structural characteristics reminiscent of vertebrate cortical networks. This model recapitulates several aspects of dementia-relevant pathological features including age-dependent neuronal loss, nuclear depletion and cytoplasmic accumulation of TDP-43, and behavioral deficits in working memory and sleep that occur prior to axonal degeneration. RNA immunoprecipitations identify several candidate mRNA targets of TDP-43 in MBs, some of which are unique to the MB circuit and others that are shared with motor neurons. Among the latter is the glypican Dally-like-protein (Dlp), which exhibits significant TDP-43 associated reduction in expression during aging. Using genetic interactions we show that overexpression of Dlp in MBs mitigates TDP-43 dependent working memory deficits, conistent with Dlp acting as a mediator of TDP-43 toxicity. Substantiating our findings in the fly model, we find that the expression of GPC6 mRNA, a human ortholog of dlp, is specifically altered in neurons exhibiting the molecular signature of TDP-43 pathology in FTD patient brains. These findings suggest that circuit-specific Drosophila models provide a platform for uncovering shared or disease-specific molecular mechanisms and vulnerabilities across the spectrum of TDP-43 proteinopathies.