It is unclear how tau gene mutations cause frontotemporal dementia (FTD) with parkinsonism linked to chromosome 17 (FTDP-17), but those in exon 10 (E10) or the following intron may be pathogenic by altering E10 splicing, perturbing the normal 1:1 ratio of four versus three microtubule-binding repeat tau (4R:3R tau ratio) and forming tau inclusions. We report on a 55-year old woman with frontotemporal dementia and a family history of FTDP-17 in whom we found a novel E12 (Glu342Val) tau gene mutation, prominent frontotemporal neuron loss, intracytoplasmic tau aggregates, paired helical tau filaments, increased 4R tau messenger RNA, increased 4R tau without E2 or E3 inserts, decreased 4R tau with these inserts, and a 4R:3R tau ratio greater than 1 in gray and white matter. Thus, this novel Glu342Val mutation may cause FTDP-17 by unprecedented mechanisms that alter splicing of E2, E3, and E10 to preferentially increase 4R tau without amino terminal inserts and promote aggregation of tau filaments into cytopathic inclusions.