Tau is a microtubule-associated protein that is highly soluble and natively unfolded. Its dysfunction is involved in the pathogenesis of several neurodegenerative disorders including Alzheimer's disease (AD), where it aggregates within neurons. Deciphering the physiological and pathogenic roles of human Tau (hTau) is crucial to further understand the mechanisms leading to its dysfunction in vivo. We have used a knock-out/knock-in strategy in Drosophila to generate a strain with hTau inserted into the endogenous fly tau locus and expressed under the control of the endogenous fly tau promoter, thus avoiding potential toxicity due to genetic over-expression. hTau knock-in (KI) proteins were expressed at normal, endogenous levels, bound to fly microtubules and were post-translationally modified, hence displaying physiological properties. We used this new model to investigate the effects of acetylation on hTau toxicity in vivo. The simultaneous pseudo-acetylation of hTau at lysines 163, 280, 281 and 369 drastically decreased hTau phosphorylation and significantly reduced its binding to microtubules in vivo. These molecular alterations were associated with ameliorated amyloid beta toxicity. Our results indicate acetylation of hTau on multiple sites regulates its biology and ameliorates amyloid beta toxicity in vivo.