Tau is a neuronal microtubule-associated protein that promotes microtubule assembly, stability, and bundling in axons. Two distinct regions of tau are important for the tau-microtubule interaction, a relatively well-characterized "repeat region" in the carboxyl terminus (containing either three or four imperfect 18-amino acid repeats separated by 13- or 14-amino acid long inter-repeats) and a more centrally located, relatively poorly characterized proline-rich region. By using amino-terminal truncation analyses of tau, we have localized the microtubule binding activity of the proline-rich region to Lys215-Asn246 and identified a small sequence within this region, 215KKVAVVR221, that exerts a strong influence on microtubule binding and assembly in both three- and four-repeat tau isoforms. Site-directed mutagenesis experiments indicate that these capabilities are derived largely from Lys215/Lys216 and Arg221. In marked contrast to synthetic peptides corresponding to the repeat region, peptides corresponding to Lys215-Asn246 and Lys215-Thr222 alone possess little or no ability to promote microtubule assembly, and the peptide Lys215-Thr222 does not effectively suppress in vitro microtubule dynamics. However, combining the proline-rich region sequences (Lys215-Asn246) with their adjacent repeat region sequences within a single peptide (Lys215-Lys272) enhances microtubule assembly by 10-fold, suggesting intramolecular interactions between the proline-rich and repeat regions. Structural complexity in this region of tau also is suggested by sequential amino-terminal deletions through the proline-rich and repeat regions, which reveal an unusual pattern of loss and gain of function. Thus, these data lead to a model in which efficient microtubule binding and assembly activities by tau require intramolecular interactions between its repeat and proline-rich regions. This model, invoking structural complexity for the microtubule-bound conformation of tau, is fundamentally different from previous models of tau structure and function, which viewed tau as a simple linear array of independently acting tubulin-binding sites.