Phosphorylated forms of microtubule-associated protein tau accumulate in neurofibrillary tangles in Alzheimer's disease. To investigate the effects of specific phosphorylated tau residues on its function, wild type or phosphomutant tau was expressed in cells. Elevated tau phosphorylation decreased its microtubule binding and bundling, and increased the number of motile tau particles, without affecting axonal transport kinetics. In contrast, reducing tau phosphorylation enhanced the amount of tau bound to microtubules and inhibited axonal transport of tau. To determine whether differential tau clearance is responsible for the increase in phosphomimic tau, we inhibited autophagy in neurons which resulted in a 3-fold accumulation of phosphomimic tau compared with wild type tau, and endogenous tau was unaffected. In autophagy-deficient mouse embryonic fibroblasts, but not in neurons, proteasomal degradation of phosphomutant tau was also reduced compared with wild type tau. Therefore, autophagic and proteasomal pathways are involved in tau degradation, with autophagy appearing to be the primary route for clearing phosphorylated tau in neurons. Defective autophagy might contribute to the accumulaton of tau in neurodegenerative diseases.