Tauopathies are neurodegenerative diseases characterized by tau protein pathology in the nervous system. EIF2AK3 (eukaryotic translation initiation factor 2 alpha kinase 3), also known as PERK (protein kinase R-like endoplasmic reticulum kinase), was identified by genome-wide association study as a genetic risk factor in several tauopathies. PERK is a key regulator of the Unfolded Protein Response (UPR), an intracellular signal transduction mechanism that protects cells from endoplasmic reticulum (ER) stress. PERK variants had previously been identified in Wolcott-Rallison Syndrome, a rare autosomal recessive metabolic disorder, and these variants completely abrogated the function of PERK's kinase domain or prevented PERK expression. In contrast, the PERK tauopathy risk variants were distinct from the Wolcott-Rallison variants and introduced missense alterations throughout the PERK protein. The function of PERK tauopathy variants and their effects on neurodegeneration are unknown. Here, we discovered that tauopathy-associated PERK alleles showed reduced signaling activity and increased PERK protein turnover compared to protective PERK alleles. We found that iPSC-derived neurons carrying PERK risk alleles were highly vulnerable to ER stress-induced injury with increased tau pathology. We found that chemical inhibition of PERK in human iPSC-derived neurons also increased neuronal cell death in response to ER stress. Our results indicate that tauopathy-associated PERK alleles are functional hypomorphs during the UPR. We propose that reduced PERK function leads to neurodegeneration by increasing neuronal vulnerability to ER stress-associated damage. In this view, therapies to enhance PERK signaling would benefit at-risk carriers of hypomorphic alleles.