Alzheimer's disease (AD) is characterized by amyloid-β (Aβ) and tau deposition in brain. It has emerged that Aβ toxicity is tau dependent, although mechanistically this link remains unclear. Here, we show that tau, known as axonal protein, has a dendritic function in postsynaptic targeting of the Src kinase Fyn, a substrate of which is the NMDA receptor (NR). Missorting of tau in transgenic mice expressing truncated tau (Δtau) and absence of tau in tau^−/− mice both disrupt postsynaptic targeting of Fyn. This uncouples NR-mediated excitotoxicity and hence mitigates Aβ toxicity. Δtau expression and tau deficiency prevent memory deficits and improve survival in Aβ-forming APP23 mice, a model of AD. These deficits are also fully rescued with a peptide that uncouples the Fyn-mediated interaction of NR and PSD-95 in vivo. Our findings suggest that this dendritic role of tau confers Aβ toxicity at the postsynapse with direct implications for pathogenesis and treatment of AD.