Tau inclusions are a shared feature of many neurodegenerative diseases, among them frontotemporal dementia caused by tau mutations. Treatment approaches for these conditions include targeting posttranslational modifications of tau proteins, maintaining a steady-state amount of tau, and preventing its tendency to aggregate. We discovered a new regulatory pathway for tau degradation that operates through the farnesylated protein, Rhes, a GTPase in the Ras family. Here, we show that treatment with the farnesyltransferase inhibitor lonafarnib reduced Rhes and decreased brain atrophy, tau inclusions, tau sumoylation, and tau ubiquitination in the rTg4510 mouse model of tauopathy. In addition, lonafarnib treatment attenuated behavioral abnormalities in rTg4510 mice and reduced microgliosis in mouse brain. Direct reduction of Rhes in the rTg4510 mouse by siRNA reproduced the results observed with lonafarnib treatment. The mechanism of lonafarnib action mediated by Rhes to reduce tau pathology was shown to operate through activation of lysosomes. We finally showed in mouse brain and in human induced pluripotent stem cell-derived neurons a normal developmental increase in Rhes that was initially suppressed by tau mutations. The known safety of lonafarnib revealed in human clinical trials for cancer suggests that this drug could be repurposed for treating tauopathies.