Alzheimer's disease (AD) and other tauopathies are characterized by fibrillar inclusions composed of the microtubule-associated protein, tau. Recently, we demonstrated that the N-terminus of tau (amino acids [aa] 2-18) in filamentous aggregates or N-terminal tau isoforms activate a signaling cascade involving protein phosphatase 1 and glycogen synthase kinase 3 that results in inhibition of anterograde fast axonal transport (FAT). We have termed the functional motif comprised of aa 2-18 in tau the phosphatase-activating domain (PAD). Here, we show that phosphorylation of tau at tyrosine 18, which is a fyn phosphorylation site within PAD, prevents inhibition of anterograde FAT induced by both filamentous tau and 6D tau. Moreover, Fyn-mediated phosphorylation of tyrosine 18 is reduced in disease-associated forms of tau (e.g., tau filaments). A novel PAD-specific monoclonal antibody revealed that exposure of PAD in tau occurs before and more frequently than tyrosine 18 phosphorylation in the evolution of tangle formation in AD. These results indicate that N-terminal phosphorylation may constitute a regulatory mechanism that controls tau-mediated inhibition of anterograde FAT in AD.