Neurofibrillary tangles (NFTs) are composed of abnormal aggregates of the cytoskeletal protein tau. Together with amyloid β (Aβ) plaques and neuronal and synaptic loss, NFTs constitute the primary pathological hallmarks of Alzheimer disease (AD). Recent evidence also suggests that caspases are activated early in the progression of AD and may play a role in neuronal loss and NFT pathology. Here we demonstrate that tau is cleaved at D421 (ΔTau) by executioner caspases. Following caspase-cleavage, ΔTau facilitates nucleation-dependent filament formation and readily adopts a conformational change recognized by the early pathological tau marker MC1. ΔTau can be phosphorylated by glycogen synthase kinase-3β and subsequently recognized by the NFT antibody PHF-1. In transgenic mice and AD brains, ΔTau associates with both early and late markers of NFTs and is correlated with cognitive decline. Additionally, ΔTau colocalizes with Aβ1-42 and is induced by Aβ1-42 in vitro. Collectively, our data imply that Aβ accumulation triggers caspase activation, leading to caspase-cleavage of tau, and that this is an early event that may precede hyperphosphorylation in the evolution of AD tangle pathology. These results suggest that therapeutics aimed at inhibiting tau caspase-cleavage may prove beneficial not only in preventing NFT formation, but also in slowing cognitive decline.