The aggregation of Tau protein is a hallmark of neurodegenerative diseases including Alzheimer's disease. Previously, we generated a cell model of tauopathy based on the 4-repeat domain with the FTDP-17 mutation ΔK280 (Tau(4RDΔK)) which is expressed in a regulatable fashion (tet-on). The deletion variant ΔK280 is highly amyloidogenic and forms fibrous aggregates in neuroblastoma N2a cells staining with the reporter dye Thioflavin S. The aggregation of Tau(4RDΔK) is toxic, contrary to wildtype or anti-aggregant variants of the protein. Using a novel approach for monitoring in situ Tau aggregation and toxicity by combination of microscopic analysis with FACS and biochemical analysis of cells enabled the dissection of the aggregating species which cause a time-dependent increase of toxicity. The dominant initiating step is the dimerization of Tau(4RDΔK) which leads to further aggregation and induces a strong increase in reactive oxygen species (ROS) and cytoplasmic Ca(2+) which damage the membranes and cause cell death. Tau-based treatments using Tau aggregation inhibitors reduce both soluble oligomeric and fully aggregated Tau species and decrease their toxicity.