Amyloid deposition of the microtubule-associated protein tau is a unifying theme in a multitude of neurodegenerative diseases. Disease-associated missense mutations in tau are associated with frontotemporal dementia (FTD) and enhance tau aggregation propensity. However, the molecular mechanism of how mutations in tau promote tau assembly into amyloids remains obscure. There is a need to understand how tau folds into pathogenic conformations to cause disease. Here we describe the structural mechanism for how an FTD-tau S320F mutation drives spontaneous aggregation. We use recombinant protein and synthetic peptide systems, computational modeling, cross-linking mass spectrometry, and cell models to investigate the mechanism of spontaneous aggregation of the S320F FTD-tau mutant. We discover that the S320F mutation drives the stabilization of a local hydrophobic cluster which allosterically exposes the 306VQIVYK311 amyloid motif. We identify a suppressor mutation that reverses the S320F aggregation phenotype through the reduction of S320F-based hydrophobic clustering in vitro and in cells. Finally, we use structure-based computational design to engineer rapidly aggregating tau sequences by optimizing nonpolar clusters in proximity to the S320 site revealing a new principle governing the regulation of tau aggregation. We uncover a mechanism for regulating aggregation that balances transient nonpolar contacts within local protective structures or in longer-range interactions that sequester amyloid motifs. The introduction of a pathogenic mutation redistributes these transient interactions to drive spontaneous aggregation. We anticipate that more profound knowledge of this process will permit control of tau aggregation into discrete structural polymorphs to aid the design of reagents that can detect disease-specific tau conformations.