Neurodegeneration in Alzheimer’s disease (AD) and other tauopathies is associated with pathologic tau protein aggregates. Autosomal dominant mutations in the tau gene, MAPT, are linked mechanistically to altered splicing or enhanced aggregation of the tau protein. We found that a previously undescribed mutation in VCP is sufficient to cause neurodegeneration in humans. This novel form of dementia is characterized by neuronal vacuoles and tau protein aggregates. Valosin-containing protein (VCP) appears to exhibit ATP- and ubiquitin-dependent tau disaggregase activity in in vitro assays. Furthermore, this tau disaggregase activity is modulated by mutations that affect VCP ATPase activity. Hydrogen exchange mass spectrometry analysis reveals the structural changes possible associated with VCP function. These changes affect the residues lining the central pore and regions involved in interprotomer contact. Finally, our in vitro findings were confirmed in vivo as mutant VCP mice displayed increased pathologic tau aggregation when challenged with intracerebral microinjection of pathologic tau from human AD brain. Our findings shed light on a new biologic function of VCP, demonstrate a novel genetic mechanism of tauopathy, and suggest a new therapeutic target for AD and related disorders.