Filamentous inclusions composed of the microtubule-associated protein tau are a defining characteristic of a large number of neurodegenerative diseases. Here we show that tau degradation in stably transfected and non-transfected SH-SY5Y cells is blocked by the irreversible proteasome inhibitor lactacystin. Further, we find that in vitro, natively unfolded tau can be directly processed by the 20S proteasome without a requirement for ubiquitylation, and that a highly reproducible pattern of degradation intermediates is readily detectable during this process. Analysis of these intermediates shows that 20S proteasomal processing of tau is bi-directional, proceeding from both N- and C-termini, and that populations of relatively stable intermediates arise probably because of less efficient digestion of the C-terminal repeat region. Our results are consistent with an in vivo role for the proteasome in tau degradation and support the existence of ubiquitin-independent pathways for the proteasomal degradation of unfolded proteins.