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Neurofibrillary tangles composed of hyperphosphorylated tau and synaptic dysfunction are characteristics of Alzheimer’s disease (AD). However, the underlying molecular mechanisms remain poorly understood. Here, we identified Amphiphysin I mediates both tau phosphorylation and synaptic dysfunction in AD. Amphiphysin I is cleaved by a cysteine proteinase asparagine endopeptidase (AEP) at N278 in the brains of AD patients. The amount of AEP-generated N-terminal fragment of Amphiphysin I (1-278) is increased with aging. Amphiphysin I (1-278) inhibits clathrin-mediated endocytosis and induces synaptic dysfunction. Furthermore, Amphiphysin I (1-278) binds p35 and promotes its transition to p25, thus activates CDK5 and enhances tau hyperphosphorylation. Overexpression of Amphiphysin I (1-278) in the hippocampus of Tau P301S mice induces synaptic dysfunction, tau hyperphosphorylation, and cognitive deficits. However, overexpression of the N278A mutant Amphiphysin I, which resists the AEP-mediated cleavage, alleviates the pathological and behavioral defects. These findings suggest a mechanism of tau hyperphosphorylation and synaptic dysfunction in AD.