The microtubule-associated tau proteins represent a family of closely related phosphoproteins that become enriched in the axons during brain development. In Alzheimer's disease (AD), tau aggregates somatodendritically in paired helical filaments in a hyperphosphorylated form. Most of the sites that are phosphorylated to a high extent in paired helical filament tau are clustered in the proline-rich region (P-region; residues 172--251) and the C-terminal tail region (C-region; residues 368--441) that flank tau's microtubule-binding repeats. This might point to a role of a region-specific phosphorylation cluster for the pathogenesis of AD. To determine the functional consequences of such modifications, mutated tau proteins were produced in which a P- or C-region-specific phosphorylation cluster was simulated by replacement of serine/threonine residues with glutamate. We show that a phosphorylation-mimicking glutamate cluster in the P-region is sufficient to block microtubule assembly and to inhibit tau's interaction with the dominant brain phosphatase protein phosphatase 2A isoform AB alpha C. P-region-specific mutations also decrease tau aggregation into filaments and decrease tau's process-inducing activity in a cellular transfection model. In contrast, a phosphorylation-mimicking glutamate cluster in the C-region is neutral with regard to these activities. A glutamate cluster in both the P- and C-regions induces the formation of SDS-resistant conformational domains in tau and suppresses tau's interaction with the neural membrane cortex. The results indicate that modifications in the proline-rich region are sufficient to induce the functional deficiencies of tau that have been observed in AD. They suggest that phosphorylation of the proline-rich region has a crucial role in mediating tau-related changes during disease.