We report functional differences between tau isoforms with 3 or 4 C-terminal repeats and a difference in susceptibility to oxidative conditions, with respect to the regulation of microtubule dynamics in vitro and tau-microtubule, binding in cultured cells. In the presence of dithiothreitol in vitro, a 3-repeat tau isoform promotes microtubule nucleation, reduces the tubulin critical concentration for microtubule assembly, and suppresses dynamic instability. Under non-reducing conditions, threshold concentrations of 3-repeat tau and tubulin exist below which this isoform still promotes microtubule, nucleation and assembly but fails to reduce the tubulin critical concentration or suppress dynamic instability; above these threshold concentrations, amorphous aggregates of 3-repeat tau and tubulin can be produced at the expense of microtubule formation. A 4-repeat tau isoform is less sensitive to the oxidative potential of the environment, behaving under oxidative conditions similarly to the 3-repeat isoform under reducing conditions. Under conditions of oxidative stress, in Chinese hamster ovary cells stably expressing either 3- or 4-repeat tau, 3-repeat tau disassociates from microtubules more readily than the 4-repeat isoform, and tau-containing high molecular weight aggregates are preferentially observed in lysates from the Chinese hamster ovary cells expressing 3-repeat tau, indicating greater susceptibility of 3-repeat tau to oxidative conditions, compared with 4-repeat tau in vivo.