The microtubule-associated protein tau (MAPT) locus has long been associated with sporadic neurodegenerative disease, notably progressive supranuclear palsy and corticobasal degeneration, and more recently with Alzheimer's disease and Parkinson's disease. However, the functional biological mechanisms behind the genetic association have only now started to emerge. The genomic architecture in the region spanning MAPT is highly complex, and includes a approximately 1.8 Mb block of linkage disequilibrium (LD). The region is divided into two major haplotypes, H1 and H2, defined by numerous single nucleotide polymorphisms and a 900 kb inversion which suppresses recombination. Fine mapping of the MAPT region has identified sub-clades of the MAPT H1 haplotype which are specifically associated with neurodegenerative disease. Here we briefly review the role of MAPT in sporadic and familial neurodegenerative disease, and then discuss recent work which, for the first time, proposes functional mechanisms to link MAPT haplotypes with the neuropathology seen in patients.