The microtubule-associated protein tau accumulates in Alzheimer's and other fatal dementias, which manifest when forebrain neurons die. Recent advances in understanding these disorders indicate that brain dysfunction precedes neurodegeneration, but the role of tau is unclear. Here, we show that early tau-related deficits develop not from the loss of synapses or neurons, but rather as a result of synaptic abnormalities caused by the accumulation of hyperphosphorylated tau within intact dendritic spines, where it disrupts synaptic function by impairing glutamate receptor trafficking or synaptic anchoring. Mutagenesis of 14 disease-associated serine and threonine amino acid residues to create pseudohyperphosphorylated tau caused tau mislocalization while creation of phosphorylation-deficient tau blocked the mistargeting of tau to dendritic spines. Thus, tau phosphorylation plays a critical role in mediating tau mislocalization and subsequent synaptic impairment. These data establish that the locus of early synaptic malfunction caused by tau resides in dendritic spines.