Abstract Apolipoprotein E4 (APOE4) is the most crucial genetic risk factor of late-onset Alzheimer’s disease (AD). However, the mechanism through which APOE4 induces AD risk remains unknown. Here, we report the astrocyte-secreted protein glypican-4 (GPC-4), as a novel binding partner of APOE4, drives tau pathology. APOE4-carrying AD patients display more tau accumulation compared to APOE4-noncarring AD patients. GPC-4 is highly expressed in APOE4 AD patients, and is regulated by microglial factors via NF-κB signaling pathway. The astrocyte-secreted GPC-4 induced both tau accumulation and spreading in vitro and in vivo. Further, GPC-4 is required for APOE4-mediated surface trafficking of low-density lipoprotein receptor-related protein 1 (LRP1) and tau propagation. GPC-4 activates unfolded protein response (UPR) pathway IRE1α, and pharmacological inhibition of IRE1α with KIRA6 blocks GPC-4 induced tau propagation. Together, our data comprehensively demonstrate that the APOE4-induced AD risk is directly mediated by GPC-4, and that perturbing GPC-4 induced IRE1α pathway has therapeutic opportunities.