The microtubule associated protein tau forms filamentous assemblies in the cytosol of neurons in several neurodegenerative diseases. In Alzheimer’s disease, tau pathology arises throughout the human brain in a spatio-temporal manner and closely correlates with disease severity. Assemblies of tau have been proposed to transit between cells of the brain in a ‘prion-like’ manner, resulting in templated aggregation of native tau in recipient neurons. Interactions between tau assemblies, surface receptor LRP1 and heparan sulphate proteoglycans promote the uptake of tau assemblies to membrane-bound vesicles. A subsequent escape from these vesicles is postulated for assemblies to enter the cytosol and contact cytosolic tau pools to induce seeded aggregation. However, the mechanistic details by which tau assemblies enter the cytosol are poorly defined. I have established a cell-based assay that permits the study of tau entry to the cytosol in real time and at physiological concentrations, in cell lines and neurons. Modulation of tau entry to the cytosol concomitantly modified levels of seeded aggregation, confirming the role of cytosolic entry as the rate-limiting, upstream step to seeding. Entry to a commonly used reporter cell line, HEK 293, occurred in a dynamin- and clathrin-dependent manner with late endosomal Rab7 GTPase involvement. In contrast, entry to primary and human neurons was via a clathrin- and dynamin-independent route that was sensitive to membrane cholesterol levels. Extraction of cholesterol from membranes rendered neurons extremely permissive to cytosolic entry and potentiated seeded aggregation at low concentrations of tau in 2D neurons and 3D organotypic slice cultures. Conversely, cholesterol supplementation or overexpression of the cholesterol transporter protein NPC1 reduced entry and almost completely blocked seeded aggregation. My findings establish entry to the cytosol as rate-limiting to seeded aggregation. They also demonstrate that dysregulated cholesterol, a feature of several neurodegenerative diseases, potentiates tau aggregation by promoting the entry of assemblies to the cytosol.