The gradual accumulation of hyperphosphorylated forms of the Tau protein (pTau) in the human brain correlate with cognitive dysfunction and neurodegeneration. I will present our recent findings on the consequences of human pTau aggregation in the hippocampal formation of a mouse tauopathy model. We show that pTau preferentially accumulates in deep-layer pyramidal neurons, leading to their neurodegeneration. In aged but not younger mice, pTau spreads to oligodendrocytes. During ‘goal-directed’ navigation, we detect fewer high-firing pyramidal cells, but coupling to network oscillations is maintained in the remaining cells. The firing patterns of individually recorded and labelled pyramidal and GABAergic neurons are similar in transgenic and non-transgenic mice, as are network oscillations, suggesting intact neuronal coordination. This is consistent with a lack of pTau in subcortical brain areas that provide rhythmic input to the cortex. Spatial memory tests reveal a reduction in short-term familiarity of spatial cues but unimpaired spatial working and reference memory. These results suggest that preserved subcortical network mechanisms compensate for the widespread pTau aggregation in the hippocampal formation. I will also briefly discuss ideas on the subcortical origins of spatial memory and the concept of the cortex as a monitoring device.