Dysfunction of the cholinergic system of the basal forebrain complex is one of the major contributors to cognitive impairment in Alzheimer’s disease (AD). In AD, degeneration of cholinergic fibers that project to the cerebral cortex and hippocampus may be attributed to the development of neurofibrillary tangles (NFT). Here, we evaluated the relationship between neurofibrillary changes and degeneration of septal cholinergic neurons in P301L tau transgenic mice. The number of cholinergic neurons in medial septum and vertical limb of the diagonal band of Broca (MS/VDB) in the basal forebrain were significantly reduced in P301L mice, compared with age-matched wild-type mice. The phospho-tau levels and NFT formation in these P301L mice were higher than wild-type mice. However, it is still unknown how the development of NFT is caused in AD and AD-like pathology. Our results show that Fas-associated factor 1 (FAF1) expression as well as caspase3 activation raised in AT8-positive MS/VDB cholinergic neurons. Furthermore, AT8-positive PHF formation was increased in proportion to FAF1 expression and caspase3 activation in MS/VDB cholinergic neurons. Based on the collective findings, we suggest that increased FAF1 expression triggers caspase-3 cleavage and activation, leading to hyperphosphorylated tau aggregation and subsequent NFT formation, in turn, initiating apoptosis in MS/VDB cholinergic neurons.