Paired helical filaments (PHFs) in the neurofibrillary tangles (NFTs) in Alzheimer's disease (AD) brains are composed of highly phosphorylated isoforms of tau (PHFtau) that fail to bind microtubules (MTs), and the levels of MT-binding competent tau are decreased in AD brains with abundant PHFtau. Because this loss of MT binding could compromise the viability of tangle-bearing AD neurons by destabilizing MTs, we asked whether these events could be initiated by inhibiting protein phosphatase 1 (PP1) and PP2A in cultured human neurons (NT2N cells) using okadaic acid (OK) and calyculin-A (CL-A). The treatment of NT2N cells with OK and CL-A increased tau phosphorylation, decreased the binding of tau to MTs, and selectively depolymerized the more stable detyrosinated MTs but not the more labile tyrosinated MTs. Significantly, this led to the rapid degeneration of axons, which are enriched in the more stable detyrosinated MTs, and PP2A was implicated in the initiation of this cascade of events because PP2A but not PP1 was closely associated with MTs in the NT2N cells. These studies imply that inactivation of PP2A in vulnerable neurons of the AD brain may play a mechanistic role in the conversion of normal tau into PHFtau, in the depolymerization of stable MTs, and in the degeneration of axons emanating from tangle-bearing neurons.