Cortical neuron death is prevalent by 9 months in rTg(tauP301L)4510 tau mutant mice (TG) and surviving pyramidal cells exhibit dendritic regression and spine loss. We used whole-cell patch-clamp recordings to investigate the impact of these marked structural changes on spontaneous excitatory and inhibitory postsynaptic currents (sEPSCs and sIPSCs) of layer 3 pyramidal cells in frontal cortical slices from behaviorally characterized TG and non-transgenic (NT) mice at this age. Frontal lobe function of TG mice was intact following a short delay interval but impaired following a long delay interval in an object recognition test, and cortical atrophy and cell loss were pronounced. Surviving TG cells had significantly reduced dendritic diameters, total spine density, and mushroom spines, yet sEPSCs were increased and sIPSCs were unchanged in frequency. Thus, despite significant regressive structural changes, synaptic responses were not reduced in TG cells, indicating that homeostatic compensatory mechanisms occur during progressive tauopathy. Consistent with this idea, surviving TG cells were more intrinsically excitable than NT cells, and exhibited sprouting of filopodia and axonal boutons. Moreover, the neuropil in TG mice showed an increased density of asymmetric synapses, although their mean size was reduced. Taken together, these data indicate that during progressive tauopathy, cortical pyramidal cells compensate for loss of afferent input by increased excitability and establishment of new synapses. These compensatory homeostatic mechanisms may play an important role in slowing the progression of neuronal network dysfunction during neurodegenerative tauopathies.