Tau is known for its pathological role in neurodegenerative diseases, including Alzheimer’s disease (AD) and other tauopathies. Tau is found in many subcellular compartments such as the cytosol and the nucleus. Although its normal role in microtubule binding is well established, its nuclear role is still unclear. Here, we reveal that tau localises to the nucleolus in undifferentiated and differentiated neuroblastoma cells (SHSY5Y), where it associates with TIP5, a key player in heterochromatin stability and ribosomal DNA (rDNA) transcriptional repression. Immunogold labelling on human brain sample confirms the physiological relevance of this finding by showing tau within the nucleolus colocalises with TIP5. Depletion of tau results in an increase in rDNA transcription with an associated decrease in heterochromatin and DNA methylation, suggesting that under normal conditions tau is involved in silencing of the rDNA. Cellular stress induced by glutamate causes nucleolar stress associated with the redistribution of nucleolar non-phosphorylated tau, in a similar manner to fibrillarin, and nuclear upsurge of phosphorylated tau (Thr231) which doesn’t colocalise with fibrillarin or nucleolar tau. This suggests that stress may impact on different nuclear tau species. In addition to involvement in rDNA transcription, nucleolar non-phosphorylated tau also undergoes stress-induced redistribution similar to many nucleolar proteins.