Tau protein is abundant in the central nervous system and involved in microtubule assembly and stabilization. It is predominantly associated with axonal microtubules and present at lower level in dendrites where it is engaged in signaling functions. Post-translational modifications of tau and its interaction with several proteins play an important regulatory role in the physiology of tau. As a consequence of abnormal modifications and expression, tau is redistributed from neuronal processes to the soma and forms toxic oligomers or aggregated deposits. The accumulation of tau protein is increasingly recognized as the neuropathological hallmark of a number of dementia disorders known as tauopathies. Dysfunction of tau protein may contribute to collapse of cytoskeleton, thereby causing improper anterograde and retrograde movement of motor proteins and their cargos on microtubules. These disturbances in intraneuronal signaling may compromise synaptic transmission as well as trophic support mechanisms in neurons.