Tauopathies are age-associated neurodegenerative diseases whose mechanistic underpinnings remain elusive, partially due to lack of appropriate human models. Current human induced pluripotent stem cell (hiPSC)-derived neurons express very low levels of 4-repeat (4R)-tau isoforms that are normally expressed in adult brain. Here, we engineered new iPSC lines to express 4R-tau and 4R-tau carrying the P301S MAPT mutation when differentiated into neurons. 4R-P301S neurons display progressive Tau inclusions upon seeding with Tau fibrils and recapitulate features of tauopathy phenotypes, including shared transcriptomic signatures, autophagic body accumulation, and impaired neuronal activity. A CRISPRi screen of genes associated with Tau pathobiology identified over 500 genetic modifiers of Tau-seeding-induced Tau propagation, including retromer VPS29 and the UFMylation cascade as top modifiers. In AD brains, the UFMylation cascade is altered in neurofibrillary-tangle-bearing neurons. Inhibiting the UFMylation cascade suppressed seeding-induced Tau propagation. This model provides a powerful platform to identify novel therapeutic strategies for 4R tauopathy.