Alzheimer disease (AD) has polyetiology. Independent of the etiology the disease is characterized histopathologically by the intraneuronal accumulation of paired helical filaments (PHF), forming neurofibrillary tangles, neuropil threads and dystrophic neurites surrounding the extracellular deposits of beta-amyloid in plaques, the second major lesion. The clincal expression of AD correlates with the presence of neurofibrillary degeneration; beta-amyloid alone does not produce the disease clinically. Thus arresting neurofibrillary degeneration offers a promising key target for therapeutic intervention of AD. The major protein subunit of PHF is the microtubule-associated protein tau. Tau in AD brain, especially PHF, is abnormally hyperphosphorylated and glycosylated. With maturation, the tangles are increasingly ubiquitinated. Levels of tau and conjugated ubiquitin are elevated both in AD brain and CSF. The AD abnormally phosphorylated tau (AD P-tau) does not promote microtubule assembly, but on dephosphorylation its microtubule promoting activity is restored to approximately that of the normal tau. The AD P-tau competes with tubulin in binding to normal tau, MAP1 and MAP2 and inhibits their microtubule assembly promoting activities. Furthermore, the AD P-tau sequesters normal MAPs from microtubules. The association of AD P-tau with normal tau but not with MAP1 or MAP2 results in the formation of tangles of 3.3 +/- 0.5 mm filaments. Deglycosylation of Alzheimer neurofibrillary tangles with endoglycosidase F/N-glycosidase F untwists the PHF resulting in tangles of thin filaments similar to those formed by association between the AD P-tau and normal tau. Dephosphorylation or deglycosylation plus dephosphorylation but not deglycosylation alone restores the microtubule assembly promoting activity of tau. In vitro AD P-tau can be dephosphorylated by protein phosphatases PP-2B, PP-2A and PP-1 but not PP-2C and all the three tau phosphatases are present in brain neurons. Tau phosphatase activity is decreased by approximately 30% in AD brain. Inhibition of PP-2A and PP-1 activities in SY5Y neuroblastoma by 10 nM okadaic acid causes breakdown of microtubules and the degeneration of these cells. It is suggested (I) that a defect(s) in the protein phosphorylation/dephosphorylation system(s) leads to a hyperphosphorylation of tau, (ii) that this altered tau causes disassembly of microtubules and consequently a retrograde neuronal degeneration; (iii) a pharmacological approach to AD is to enhance the tau phosphatase activity; and (iv) that CSF tau and conjugated ubiquitin levels are promising markers of AD brain pathology.