Tau is a microtubule-associated neuronal protein, whose primary role was long thought to regulate axonal microtubule assembly. Tau is subject to many posttranslational modifications and can aggregate into neurofibrillary tangles, which are considered to be a hallmark of several neurodegenerative diseases collectively called “tauopathies”. The most common tauopathy is Alzheimer's disease, where tau pathology correlates with sites of neurodegeneration. Tau belongs to the class of intrinsically disordered proteins, which are known to interact with many partners and are considered to be involved in various signaling, regulation and recognition processes. Thus more recent evidence indicates that tau functionally interacts with many proteins and different cellular structures, which may have an important physiological role and may be involved in neurodegenerative processes. Furthermore, tau can be released from neurons and exert functional effects on other cells. This review article weighs the evidence that tau has subtle but important systemic effects on neuronal network function by maintaining physiological neuronal transmission and synaptic plasticity, which are possibly independent from tau's microtubule modulating activities. Implications for tau-based therapeutic approaches are discussed.