In a normal mature neuron, microtubule associated protein tau promotes the assembly of tubulin into microtubules and maintains the structure of microtubules. In Alzheimer disease brain, tau is abnormally hyperphosphorylated and is the major protein subunit of paired helical filaments (PHF). In the present study, the biological activity of tau in PHF and the effect of dephosphorylation on this activity were examined. PHF were isolated from Alzheimer disease brains and tau from the untreated or alkaline phosphatase-treated PHF was extracted by ultrasonication in microtubule assembly buffer. Tubulin was isolated by phosphocellulose chromatography of three cycled microtubules from bovine brain. PHF-tau did not promote assembly of bovine tubulin into microtubules whereas tau from the dephosphorylated PHF produced a robust microtubule assembly. These studies suggest (i) that in Alzheimer disease tau in PHF is functionally inactive because of abnormal phosphorylation and (ii) that the abnormally phosphorylated site(s) in PHF that inactivates PHF-tau is accessible to enzymatic dephosphorylation in vitro.