Tau is implicated in more than 20 neurodegenerative diseases, including Alzheimer’s disease. Under pathological conditions, Tau dissociates from axonal microtubules and missorts to pre- and postsynaptic terminals. Patients suffer from early synaptic dysfunction prior to Tau aggregate formation, but the underlying mechanism is unclear. Here we show that pathogenic Tau binds to synaptic vesicles via its N-terminal domain and interferes with presynaptic functions, including synaptic vesicle mobility and release rate, lowering neurotransmission in fly and rat neurons. Pathological Tau mutants lacking the vesicle binding domain still localize to the presynaptic compartment but do not impair synaptic function in fly neurons. Moreover, an exogenously applied membrane-permeable peptide that competes for Tau-vesicle binding suppresses Tau-induced synaptic toxicity in rat neurons. Our work uncovers a presynaptic role of Tau that may be part of the early pathology in various Tauopathies and could be exploited therapeutically.