Abnormal phosphorylation and toxicity of a microtubule-associated protein tau are involved in the pathogenesis of Alzheimer's disease (AD); however, what pathological conditions trigger tau abnormality in AD is not fully understood. A reduction in the number of mitochondria in the axon has been implicated in AD. In this study, we investigated whether and how loss of axonal mitochondria promotes tau phosphorylation and toxicity in vivo. Using transgenic Drosophila expressing human tau, we found that RNAi-mediated knockdown of milton or Miro, an adaptor protein essential for axonal transport of mitochondria, enhanced human tau-induced neurodegeneration. Tau phosphorylation at an AD-related site Ser262 increased with knockdown of milton or Miro; and partitioning defective-1 (PAR-1), the Drosophila homolog of mammalian microtubule affinity-regulating kinase, mediated this increase of tau phosphorylation. Tau phosphorylation at Ser262 has been reported to promote tau detachment from microtubules, and we found that the levels of microtubule-unbound free tau increased by milton knockdown. Blocking tau phosphorylation at Ser262 site by PAR-1 knockdown or by mutating the Ser262 site to unphosphorylatable alanine suppressed the enhancement of tau-induced neurodegeneration caused by milton knockdown. Furthermore, knockdown of milton or Miro increased the levels of active PAR-1. These results suggest that an increase in tau phosphorylation at Ser262 through PAR-1 contributes to tau-mediated neurodegeneration under a pathological condition in which axonal mitochondria is depleted. Intriguingly, we found that knockdown of milton or Miro alone caused late-onset neurodegeneration in the fly brain, and this neurodegeneration could be suppressed by knockdown of Drosophila tau or PAR-1. Our results suggest that loss of axonal mitochondria may play an important role in tau phosphorylation and toxicity in the pathogenesis of AD.