Abnormal aggregation of the microtubule-associated protein, tau, occurs in many neurodegenerative diseases, making it important to understand the mechanisms of tau polymerization. Previous work has indicated that the C-terminal region of tau inhibits polymerization in vitro, and a growing body of evidence implicates caspase cleavage of tau at Asp 421 in the C-terminus as an important inducer of tau polymerization in Alzheimer's disease. In the present study, we provide evidence that the C-terminal peptide fragment produced by caspase cleavage inhibits tau polymerization, suggesting that caspase cleavage of tau enhances its polymerization by removing the inhibitory control element. Moreover, we provide evidence that the peptide assumes an alpha-helical configuration and inhibits tau assembly by interacting with residues 321-375 in the microtubule binding repeat region. These findings indicate that formation of the fibrillar pathologies during the course of Alzheimer's disease may be driven or sustained by apoptotic events leading to caspase activation.