Aggregation and cleavage are two hallmarks of Tau pathology in Alzheimer disease (AD), and abnormal fragmentation of Tau is thought to contribute to the nucleation of Tau paired helical filaments. Clearance of the abnormally modified protein could occur by the ubiquitin-proteasome and autophagy-lysosomal pathways, the two major routes for protein degradation in cells. There is a debate on which of these pathways contributes to clearance of Tau protein and of the abnormal Tau aggregates formed in AD. Here, we demonstrate in an inducible neuronal cell model of tauopathy that the autophagy-lysosomal system contributes to both Tau fragmentation into pro-aggregating forms and to clearance of Tau aggregates. Inhibition of macroautophagy enhances Tau aggregation and cytotoxicity. The Tau repeat domain can be cleaved near the N terminus by a cytosolic protease to generate the fragment F1. Additional cleavage near the C terminus by the lysosomal protease cathepsin L is required to generate Tau fragments F2 and F3 that are highly amyloidogenic and capable of seeding the aggregation of Tau. We identify in this work that components of a selective form of autophagy, chaperone-mediated autophagy, are involved in the delivery of cytosolic Tau to lysosomes for this limited cleavage. However, F1 does not fully enter the lysosome but remains associated with the lysosomal membrane. Inefficient translocation of the Tau fragments across the lysosomal membrane seems to promote formation of Tau oligomers at the surface of these organelles which may act as precursors of aggregation and interfere with lysosomal functioning.