The decline in proteostasis during aging is a major contributing factor to increased susceptibility to neurodegenerative diseases such as Alzheimer’s disease. Although dysfunction of the autophagy pathway is likely one of the contributors, emerging studies implicate that impairment of the endosome-lysosome pathway is also a significant factor in the pathogenesis of these diseases. Our lab was the first to demonstrate that BAG3 facilitates phosphorylated tau clearance through autophagy. However, we did not fully define the mechanisms by which BAG3 regulates endogenous tau proteostasis. Here, we applied mass spectrometric analyses and found a major group of neuronal BAG3 interactors are in the endocytic pathway. Among them were key regulators of small GTPases. Excitingly one of these was the Rab35 GTPase activating protein, TBC1D10B. Our data demonstrate that a BAG3-HSP70-TBC1D10B complex attenuates the ability of TBC1D10B to inactivate Rab35. Thus BAG3, through its interaction with TBC1D10B supports the activation of Rab35 and recruitment of Hrs, which initiates ESCRT-mediated endosomal tau clearance. Further, intrahippocampal expression of BAG3 in P301S mice increased the co-localization of phospho-tau with the ESCRT III protein CHMP2B and reduced the levels of the mutant human tau. Overall, our data provide evidence of a novel BAG3-TBC1D10B-Rab35 regulatory axis in modulating vacuolar dependent protein degradation machinery through ESCRT. These findings expand our understanding of the role of BAG3 in neuronal proteostasis, and how dysregulation could contribute to the pathogenesis of Alzheimer’s disease, as well as other neurodegenerative diseases.