Alterations in the microtubule (MT)-associated protein, tau, have emerged as a pivotal phenomenon in several neurodegenerative disorders, including frontotemporal dementia and Alzheimer's disease. Although compelling lines of evidence from various experimental models suggest that hyperphosphorylation and conformational changes of tau can cause its aggregation into filaments, the actual tau species and effective mechanisms that conspire to trigger the degeneration of human neurons remain obscure. Herein, we explored whether human embryonic stem cell-derived neural stem cells can be exploited to study consequences of an overexpression of 2N4R tau (two normal N-terminal and four MT-binding domains; n-tau) versus pseudohyperphosphorylated tau (p-tau) directly in human neurons. Given the involvement of tau in MT integrity and cellular homeostasis, we focused on the effects of both tau variants on subcellular transport and neuronal survival. By using inducible lentiviral overexpression, we show that p-tau, but not n-tau, readily leads to an MC-1-positive protein conformation and impaired mitochondrial transport. Although these alterations do not induce cell death under standard culture conditions, p-tau-expressing neurons cultured under non-redox-protected conditions undergo degeneration with formation of axonal varicosities sequestering transported proteins and progressive neuronal cell death. Our data support a causative link between the phosphorylation and conformational state of tau, microtubuli-based transport, and the vulnerability of human neurons to oxidative stress. They further depict human embryonic stem cell-derived neurons as a useful experimental model for studying tau-associated cellular alterations in an authentic human system.