Tauopathies, including Alzheimer's disease (AD), are manifested by the deposition of well-characterized amyloid aggregates of Tau protein in the brain. However, it is rather unlikely that these aggregates constitute the major form of Tau responsible for neurodegenerative changes. Currently, it is postulated that the intermediates termed as soluble oligomers, assembled on the amyloidogenic pathway, are the most neurotoxic form of Tau. However, Tau oligomers reported so far represent a population of poorly characterized, heterogeneous and unstable assemblies. In this study, to obtain the oligomers, we employed the aggregation-prone K18 fragment of Tau protein with deletion of Lys280 (K18Δ280) linked to a hereditary tauopathy. We have described a new procedure of inducing aggregation of mutated K18 which leads either to the formation of nontoxic amyloid fibrils or neurotoxic globular oligomers, depending on its phosphorylation status. We demonstrate that PKA-phosphorylated K18Δ280 oligomers are toxic to hippocampal neurons, which is manifested by loss of dendritic spines and neurites, and impairment of cell-membrane integrity leading to cell death. We also show that N1, the soluble N-terminal fragment of prion protein (PrP), protects neurons from the oligomers-induced cytotoxicity. Our findings support the hypothesis on the neurotoxicity of Tau oligomers and neuroprotective role of PrP-derived fragments in AD and other tauopathies. These observations could be useful in the development of therapeutic strategies for these diseases.