Neurologic manifestations are an immediate consequence of SARS-CoV-2 infection, the etiologic agent of COVID-19, which, however, may also trigger long-term neurological effects. Notably, COVID-19 patients with neurological symptoms show elevated levels of biomarkers associated with brain injury, including Tau proteins linked to Alzheimer’s pathology. Studies in brain organoids revealed that SARS-CoV-2 alters the phosphorylation and distribution of Tau in infected neurons, but the mechanisms are currently unknown. We hypothesize that these pathological changes are due to the recruitment of Tau into stress granules (SGs) operated by the nucleocapsid protein (NCAP) of SARS-CoV-2. To test this hypothesis, we investigated whether NCAP interacts with Tau and localizes to SGs in hippocampal neurons in vitro and in vivo. Mechanistically, we tested whether SUMOylation, a posttranslational modification of NCAP and Tau, modulates their distribution in SGs and their pathological interaction. We found that NCAP and Tau colocalize and physically interact. We also found that NCAP induces hyperphosphorylation of Tau and causes cognitive impairment in mice infected with NCAP in their hippocampus. Finally, we found that SUMOylation modulates NCAP SG formation in vitro and cognitive performance in infected mice. Our data demonstrate that NCAP induces Tau pathological changes both in vitro and in vivo. Moreover, we demonstrate that SUMO2 ameliorates NCAP-induced Tau pathology, highlighting the importance of the SUMOylation pathway as a target of intervention against neurotoxic insults, such as Tau oligomers and viral infection.