Hyperphosphorylated forms of the microtubule-associated protein (MAP) tau accumulate in Alzheimer's disease and related tauopathies and are thought to have an important role in neurodegeneration. However, the mechanisms through which phosphorylated tau induces neurodegeneration have remained elusive. Here, we show that tau-induced neurodegeneration is associated with accumulation of filamentous actin (F-actin) and the formation of actin-rich rods in Drosophila and mouse models of tauopathy. Importantly, modulating F-actin levels genetically leads to dramatic modification of tau-induced neurodegeneration. The ability of tau to interact with F-actin in vivo and in vitro provides a molecular mechanism for the observed phenotypes. Finally, we show that the Alzheimer's disease-linked human beta-amyloid protein (Abeta) synergistically enhances the ability of wild-type tau to promote alterations in the actin cytoskeleton and neurodegeneration. These findings raise the possibility that a direct interaction between tau and actin may be a critical mediator of tau-induced neurotoxicity in Alzheimer's disease and related disorders.