Neurodegeneration in ALS and FTD results from both gain of toxicity and loss of normal function of the RNA-binding protein TDP-43, but their mechanistic connection remains unclear. Increasing evidence suggests that TDP-43 aggregates act as self-templating seeds, propagating pathology through the central nervous system via a prion-like cascade. We developed a robust TDP-43 seeding platform for quantitative, high-throughput assessment of TDP-43 aggregate uptake, cell-to-cell spreading and loss of function within living cells, while they progress towards pathology. We show that both patient-derived and recombinant TDP-43 pathological aggregates were abundantly internalized in human neuron-like cells, efficiently recruited endogenous TDP-43 and formed cytoplasmic inclusions reminiscent of ALS/FTD pathology. These neoaggregates progressively drove the nuclear egress of TDP-43 leading to its loss of function. Our model demonstrates the link between TDP-43 aggregation and aberrant cryptic splicing and provides new tools to identify genetic or pharmacologic modifiers of each step in the process.