Patients with Alzheimer's disease (AD) with little or no quantifiable insoluble brain tau neurofibrillary tangle (NFT) pathology demonstrate stronger clinical benefits of therapies than those with advanced NFTs. The formation of NFTs can be prevented by targeting the intermediate soluble tau assemblies (STAs). However, biochemical understanding and biomarkers of STAs are lacking. We show that Tris-buffered saline-soluble tau aggregates from autopsy-verified AD brain tissues include the core sequence ~tau258-368. In neuropathological assessments, antibodies against the phosphorylation sites serine-262 and serine-356 within the STA core almost exclusively stained granular (that is, prefibrillar) tau aggregates in pre-NFTs while antibodies against phosphorylation at serine-202 and threonine-205 and threonine-231, outside the STA core, stained the entire spectrum of tau aggregates in pre-NFTs and mature NFTs, dystrophic neurites and neuropil threads in the hippocampus. Functionally, a recombinantly produced STA core peptide robustly altered neuronal excitability and synaptic transmission in mouse hippocampal brain slices. Furthermore, we developed a cerebrospinal fluid assay that differentiated STAs in AD from non-AD tauopathies, correlated with the severity of NFT burden and cognitive decline independently of amyloid beta deposition, and with tau positron emission tomography uptake across Braak NFT stages. Together, our findings inform about the status of early-stage tau aggregation, reveal aggregation-relevant phosphorylation epitopes in tau and offer a diagnostic biomarker and targeted therapeutic opportunities for AD.