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Tau is a multifaceted neuronal protein that stabilizes microtubules (MTs), but the mechanism of this activity remains poorly understood. Questions include whether Tau binds MTs laterally or longitudinally and whether Tau's binding affinity depends on the nucleotide state of tubulin. We observed that Tau binds tightly to Dolastatin-10 tubulin rings and promotes the formation of Dolastatin-10 ring stacks, implying that Tau can crosslink MT protofilaments laterally. In addition, we found that Tau prefers GDP-like tubulin conformations, which implies that Tau binding to the MT surface is biased away from the dynamic GTP-rich MT tip. To investigate the potential impact of these Tau activities on MT stabilization, we incorporated them into our previously developed dimer-scale computational model of MT dynamics. We found that lateral crosslinking activities have a much greater effect on MT stability than do longitudinal crosslinking activities, and that introducing a bias toward GDP tubulin has little impact on the observed MT stabilization. To address the question of why Tau is GDP-tubulin-biased, we tested whether Tau might affect MT binding of the +TIP EB1. We confirmed recent reports that Tau binds directly to EB1 and that Tau competes with EB1 for MT binding. Our results lead to a conceptual model where Tau stabilizes the MT lattice by strengthening lateral interactions between protofilaments. We propose that Tau's GDP preference allows the cell to independently regulate the dynamics of the MT tip and the stability of the lattice.