Alzheimer's disease (AD) continues to be the most common cause of cognitive and motor alterations in the aging population. Accumulation of amyloid beta (Abeta)-protein oligomers and the microtubule associated protein-TAU might be responsible for the neurological damage. We have previously shown that Cerebrolysin (CBL) reduces the synaptic and behavioral deficits in amyloid precursor protein (APP) transgenic (tg) mice by decreasing APP phosphorylation via modulation of glycogen synthase kinase-3beta (GSK3beta) and cyclin-dependent kinase-5 (CDK5) activity. These kinases also regulate TAU phosphorylation and are involved in promoting neurofibrillary pathology. In order to investigate the neuroprotective effects of CBL on TAU pathology, a new model for neurofibrillary alterations was developed using somatic gene transfer with adeno-associated virus (AAV2)-mutant (mut) TAU (P301L). The Thy1-APP tg mice (3 m/o) received bilateral injections of AAV2-mutTAU or AAV2-GFP, into the hippocampus. After 3 months, compared to non-tg controls, in APP tg mice intra-hippocampal injections with AAV2-mutTAU resulted in localized increased accumulation of phosphorylated TAU and neurodegeneration. Compared with vehicle controls, treatment with CBL in APP tg injected with AAV2-mutTAU resulted in a significant decrease in the levels of TAU phosphorylation at critical sites dependent on GSK3beta and CDK5 activity. This was accompanied by amelioration of the neurodegenerative alterations in the hippocampus. This study supports the concept that the neuroprotective effects of CBL may involve the reduction of TAU phosphorylation by regulating kinase activity.