Abnormal tau-immunoreactive filaments are a hallmark of tauopathies, including Alzheimer's disease (AD). A higher phosphorylation ("hyperphosphorylation") state of tau protein may represent a critical event. To determine the potential role of tau hyperphosphorylation in these disorders, mutated tau proteins were produced where serine/threonine residues known to be highly phosphorylated in tau filaments isolated from AD patients were substituted for glutamate to simulate a paired helical filament (PHF)-like tau hyperphosphorylation. We demonstrate that, like hyperphosphorylation, glutamate substitutions induce compact structure elements and SDS-resistant conformational domains in tau protein. Hyperphosphorylation-mimicking glutamate-mutated tau proteins display a complete functional loss in its ability to promote microtubule nucleation which can partially be overcome by addition of the osmolyte trimethylamine N-oxide (TMAO), which is similar to phosphorylated tau. In addition, glutamate-mutated tau proteins fail to interact with the dominant brain protein phosphatase 2A isoform ABalphaC, and exhibit a reduced ability to assemble into filaments. Interestingly, wild-type tau and phosphorylation-mimicking tau similarly bind to microtubules when added alone, but the mutated tau is almost completely displaced from the microtubule surface by equimolar concentrations of wild-type tau. The data indicate that glutamate-mutated tau proteins provide a useful model for analyzing the functional consequences of tau hyperphosphorylation. They suggest that several mechanisms contribute to the abnormal tau accumulation observed during tauopathies, in particular a selective displacement of hyperphosphorylated tau from microtubules, a functional loss in promoting microtubule nucleation, and a failure to interact with phosphatases.