The majority of cases with frontotemporal dementia (FTD) have no tau deposition in the brain, yet mutations in the tau gene lead to a similar clinical phenotype with insoluble tau depositing in neuropathological lesions. We report two tau gene mutations at positions +19 and +29, in the intronic sequences immediately following the stem loop structure in exon 10, which segregate with FTD. Exon-trapping experiments showed that these gene mutations alter the splicing out of exon 10 and produce an increase in tau isoforms with three microtubule binding domains (three repeat tau). Mutagenesis experiments demonstrated that the +19 mutation was responsible for the increase in three repeat tau, possibly by altering an intron silencer modulator sequence element found at this region of the gene. Microtubule binding experiments revealed a significant decrease in microtubule assembly with increasing amounts of three and decreasing amounts of four repeat tau. Brain autopsy was available in one case. Analysis of the type of soluble tau isoforms revealed an increase in three repeat tau and an absence of tau isoforms with exon 3 inserts. No insoluble tau was isolated in the tissue fractions, consistent with the absence of tau-positive histopathology. There was also an increase in tau degradation products suggestive of increased proteolysis. This increase in tau breakdown products was associated with TUNEL- and activated caspase-3-positive neurons identified histologically. These studies show that increases in soluble three repeat tau can be responsible for FTD in cases with tau gene mutations in the intronic region immediately adjacent to the stem loop in exon 10. These cases of FTD have tau isoforms (without exon 3 inserts) that do not form abnormal aggregates and appear more prone to proteolysis. The increase in tau proteolysis was associated with increased evidence of apoptosis. This mechanism of neurodegeneration may be more applicable to the majority of FTD cases, which do not accumulate insoluble tau deposits.