Intracellular aggregation of tau is a pathological hallmark in Alzheimer's disease and other tauopathies. The mechanisms underlying tau aggregation and the role that these aggregates play in neuronal death have remained controversial. To study these issues, we established a cell culture model of tauopathy using a hexameric peptide with the sequence (306)VQIVYK(311) located within the third microtubule-binding repeat of tau, rendered cell-permeable by a tag of nine arginine residues (R(9)). This peptide (VQIVYK-R(9)), designated as T-peptide, self-assembles in vitro into paired helical filament-like aggregates. Primary neuronal cells treated with T-peptide die within 24 hr. Neurodegeneration correlates with the ability of the peptide to aggregate. Two peptides with mutations in the hexameric core, K-peptide (VQIVKK) and VV-peptide (VQVVVK), that are incapable of aggregating are not toxic, whereas two other mutant peptides, V-peptide (VQVVYK) and F-peptide (VQIVFK), which aggregate, are also neurotoxic. Two other peptides that aggregate in vitro, but are not derived from tau, are not neurotoxic suggesting sequence dependence. Although localizing to the nucleus, T-peptide induces aggregation of cellular proteins in the cytoplasm. These aggregates are not caused by disruption of endogenous tau localization, although endogenous tau is reduced in neurons exposed to T-peptide. Interestingly, nonneuronal cells are less sensitive to T-peptide toxicity, recapitulating in part the selective loss of neurons in tauopathies. Moreover, T-peptide treatment leads to mitochondrial dysfunction, a common feature of neurodegenerative disorders. The model system described here represents a convenient paradigm for studying the mechanisms underlying tau aggregation and neurotoxicity and for identifying compounds that can prevent these effects.