In Alzheimer's disease (AD), in aging, and under conditions of oxidative stress, the levels of reactive carbonyl compounds continuously increase. Accumulating carbonyl levels might be caused by an impaired enzymatic detoxification system. The major dicarbonyl detoxifying system is the glyoxalase system, which removes methylglyoxal in order to minimize cellular impairment. Although a reduced activity of glyoxalase I was evident in aging brains, it is not known how raising the intracellular methylglyoxal level influences neuronal function and the phosphorylation pattern of tau protein, which is known to be abnormally hyperphosphorylated in AD. To simulate a reduced glyoxalase I activity, we applied an inhibitor of glyoxalase I, p‐bromobenzylglutathione cyclopentyl diester (pBrBzGSCp₂), to SH‐SY5Y neuroblastoma cells to induce chronically elevated methylglyoxal concentrations. We have shown that 10 μM pBrBzGSCp₂ leads to a fourfold elevation of the methylglyoxal level after 24 hr. In addition, glyoxalase I inhibition leads to reduced cell viability, strongly retracted neuritis, increase in [Ca²⁺]_i, and activation of caspase‐3. However, pBrBzGSCp₂ did not lead to tau “hyper”‐phosphorylation despite activation of p38 mitogen‐activated protein kinase and c‐Jun NH₂‐terminal kinase but rather activated protein phosphatases 2 and induced tau dephosphorylation at the Ser²⁰²/Thr²⁰⁵ and Ser³⁹⁶/Ser⁴⁰⁴ epitopes. Preincubation with the carbonyl scavenger aminoguanidine prevented tau dephosphorylation, indicating the specific effect of methylglyoxal. Also, pretreatment with the inhibitor okadaic acid prevented tau dephosphorylation, indicating that methylglyoxal activates PP‐2A. In summary, our data suggest that a reduced glyoxalase I activity mimics some changes associated with neurodegeneration, such as neurite retraction and apoptotic cell death. © 2006 Wiley‐Liss, Inc.