Sequence variants in TMEM106B have been associated with an increased risk of developing dementia. As part of our efforts to generate a set of mouse lines in which we replaced the mouse Tmem106b gene with a human TMEM106B gene comprised of either a risk or protective haplotype, we conducted an in-depth sequence analysis of these alleles. We also analyzed transcribed TMEM106B sequences using RNA-seq data (AD Knowledge portal) and full genome sequences (1000 Genomes). We identified an AluYb8 insertion in the 3' untranslated region (3'UTR) of the TMEM106B risk haplotype. We found this AluYb8 insertion in every risk haplotype analyzed, but not in either protective haplotypes or in non-human primates. We conclude that this risk haplotype arose early in human development with a single Alu-insertion event within a unique haplotype context. This AluYb8 element may act as a functional variant in conferring an increased risk of developing dementia. We conducted an in-depth sequence analysis of (1) a risk and (2) a protective haplotype of the human TMEM106B gene. We also analyzed transcribed TMEM106B sequences using RNA-seq data (AD Knowledge Portal) and full genome sequences (1000 Genomes). We identified an AluYb8 insertion in the 3' untranslated region (3'UTR) of the TMEM106B risk haplotype. We found this AluYb8 insertion in every risk haplotype analyzed, but not in either protective haplotypes or in non-human primates. This AluYb8 element may act as a functional variant in conferring an increased risk of developing dementia.