The activity of protein phosphatase (PP)-2A, which regulates tau phosphorylation, is compromised in Alzheimer disease brain. Here we show that the transient transfection of PC12 cells with inhibitor-2 (I-2(PP2A)) of PP2A causes abnormal hyperphosphorylation of tau at Ser396/Ser4O4 and Ser262/Ser356. This hyperphosphorylation of tau is observed only when a subcellular shift of I-2(PP2A) takes place from the nucleus to the cytoplasm and is accompanied by cleavage of I-2(PP2A) into a 20 kDa 2 fragment. Memantine, an un-competitive inhibitor of N-methyl-D-aspartate receptors, inhibits this abnormal phosphorylation of I-2(PP2A)-induced inhibition of tau and cell death and prevents the I-2(PP2A) activity in vitro. These findings demonstrate novel mechanisms by which I-2(PP2A) regulates the intracellular activity of PP2A and phosphorylation of tau, and by which Memantine modulates PP2A signaling and inhibits neurofibrillary degeneration. (c) 2006 Federation of European Biochemical Societies. Published by Elsevier B.V. All rights reserved.