Tau becomes hyperphosphorylated in Alzheimer's disease (AD) and frontotemporal lobar degeneration (FTLD-tau), resulting in functional deficits of neurones, neurofibrillary tangle (NFT) formation and eventually dementia. Expression of mutant human tau in the brains of transgenic mice has produced different lines that recapitulate various aspects of FTLD-tau and AD. In this study, we characterized the novel P301S mutant tau transgenic mouse line, TAU58/2. Both young and aged TAU58/2 mice underwent extensive motor testing, after which brain tissue was analysed with immunohistochemistry, silver staining, electron microscopy and Western blotting. Tissue from various FTLD subtypes and AD patients was also analysed for comparison. TAU58/2 mice presented with early-onset motor deficits, which became more pronounced with age. Throughout the brains of these mice, tau was progressively hyperphosphorylated resulting in increased NFT formation with age. In addition, frequent axonal swellings that stained intensively for neurofilament (NF) were present in young TAU58/2 mice prior to NFT formation. Similar axonal pathology was also observed in human FTLD-tau and AD. Interestingly, activated microglia were found in close proximity to neurones harbouring transgenic tau, but were not associated with NF-positive axonal swellings. In TAU58/2 mice, early tau pathology induces functional deficits of neurones associated with NF pathology. This appears to be specific to tau, as similar changes are observed in FTLD-tau, but not in FTLD with TDP-43 inclusions. Therefore, TAU58/2 mice recapitulate aspects of human FTLD-tau and AD pathology, and will become instrumental in studying disease mechanisms and therapeutics in the future.