Molecular chaperones and their functions in protein folding have been implicated in several neurodegenerative diseases, including Parkinson's disease and Huntington's disease, which are characterized by accumulation of protein aggregates (e.g., alpha-synuclein and huntingtin, respectively). These aggregates have been shown in various experimental systems to respond to changes in levels of molecular chaperones suggesting the possibility of therapeutic intervention and a role for chaperones in disease pathogenesis. It remains unclear whether chaperones also play a role in Alzheimer's disease, a neurodegenerative disorder characterized by beta-amyloid and tau protein aggregates. Here, we report an inverse relationship between aggregated tau and the levels of heat shock protein (Hsp)7090 in tau transgenic mouse and Alzheimer's disease brains. In various cellular models, increased levels of Hsp70 and Hsp90 promote tau solubility and tau binding to microtubules, reduce insoluble tau and cause reduced tau phosphorylation. Conversely, lowered levels of Hsp70 and Hsp90 result in the opposite effects. We have also demonstrated a direct association of the chaperones with tau proteins. Our results suggest that up-regulation of molecular chaperones may suppress formation of neurofibrillary tangles by partitioning tau into a productive folding pathway and thereby preventing tau aggregation.