BACKGROUND Alzheimer's disease (AD) is associated with neurofibrillary pathology, including neurofibrillary tangles (NFT), neuritic plaques (NP) and neuropil threads containing aggregated microtubule associated protein tau. Aggregated tau is also associated with granulovacuolar degeneration (GVD). The relationships between tau, GVD, NFT and dementia are unclear. METHODS We assessed hippocampal (CA1) tau-immunoreactive GVD and NFT pathology in brain donations from the population-representative Cambridge City over 75s Cohort (CC75C) using the CERAD protocol and a modified protocol that included a morphological characterisation of tau-immunoreactive deposits within neurons as NFTs or as GVD. Associations between GVD, NFT and dementia were investigated. RESULTS Hippocampal pyramidal neurons affected with either NFT or GVD are common in the older population. Some tau-immunoreactive deposits resemble ghost GVD neurons. Tau immunoreactivity identified GVD in 95% cases rated as none with haematoxylin and eosin staining. Both severe NFT (odds ratio (OR) 7.33, 95% confidence interval (CI) 2.01; 26.80, p = 0.003) and severe GVD (OR 7.48, 95% (CI) 1.54; 36.24, p = 0.012) were associated with dementia status. Increasing NFT (OR 2.47 95% (CI) 1.45; 4.22, p = 0.001) and GVD (OR 2.12 95% (CI) 1.23; 3.64, p = 0.007) severities are associated with increasing dementia severity. However, when the analyses were controlled for other neuropathologies (NFT, NP, Tar-DNA binding Protein-43 and amyloid deposits), the associations between GVD and dementia lost significance. CONCLUSIONS Current neuropathological assessments do not adequately evaluate the presence and severity of the GVD pathology and its contribution to dementia remains unclear. We recommend that protocols to assess GVD should be developed for routine use and that tau, in a non-PHF associated conformation, is reliably associated with GVD.