Disrupted homeostasis of the microtubule binding protein tau is a shared feature of a set of neurodegenerative disorders known as tauopathies. Acetylation of soluble tau is an early pathological event in neurodegeneration. In this work, we find that a large fraction of neuronal tau is degraded by chaperone-mediated autophagy (CMA) whereas, upon acetylation, tau is preferentially degraded by macroautophagy and endosomal microautophagy. Rerouting of acetylated tau to these other autophagic pathways originates, in part, from the inhibitory effect that acetylated tau exerts on CMA and results in its extracellular release. In fact, experimental blockage of CMA enhances cell-to-cell propagation of pathogenic tau in a mouse model of tauopathy. Furthermore, analysis of lysosomes isolated from brains of patients with tauopathies demonstrates similar molecular mechanisms leading to CMA dysfunction. This study reveals that CMA failure in tauopathy brains alters tau homeostasis and could contribute to aggravate disease progression. The tau protein has been implicated in neurodegenerative disorders and can propagate from cell to cell. Here, the authors show that tau acetylation reduces its degradation by chaperone-mediated autophagy, causing re-routing to other autophagic pathways and increasing extracellular tau release.