Protein phosphatase 2A (PP2A) regulates many essential aspects of cellular physiology. Members of the regulatory B/B55/PR55 family are thought to play a key role in the dephosphorylation of Tau, whose hyperphosphorylation contributes to Alzheimer's disease. The underlying mechanisms of the PP2A-Tau connection remain largely enigmatic. Here, we report the complete reconstitution of a Tau dephosphorylation assay and the crystal structure of a heterotrimeric PP2A holoenzyme involving the regulatory subunit Balpha. We show that Balpha specifically and markedly facilitates dephosphorylation of the phosphorylated Tau in our reconstituted assay. The Balpha subunit comprises a seven-bladed beta propeller, with an acidic, substrate-binding groove located in the center of the propeller. The beta propeller latches onto the ridge of the PP2A scaffold subunit with the help of a protruding beta hairpin arm. Structure-guided mutagenesis studies revealed the underpinnings of PP2A-mediated dephosphorylation of Tau.