The microtubule-associated protein tau aggregates in multiple neurodegenerative diseases, causing inflammation and changing the inflammatory signature of microglia by unknown mechanisms. We have shown that microglia phagocytose live neurons containing tau aggregates cultured from P301S tau transgenic mice due to neuronal tau aggregate-induced exposure of the 'eat me' signal phosphatidylserine. Here we show that after phagocytosis, microglia become hypophagocytic while releasing seed-competent insoluble tau aggregates. These microglia activate acidic β-galactosidase, and release senescence-associated cytokines and matrix remodeling enzymes alongside tau, indicating a senescent phenotype. In particular, the marked NFκB-induced activation of matrix metalloprotease 3 (MMP3/stromelysin1) was replicated in the brains of P301S mutant tau transgenic mice, and in human brains from tauopathy patients. These data show that microglia that have been activated to ingest live neurons with tau aggregates behave hormetically, becoming hypofunctional while acting as vectors of tau aggregate spreading.