Tau is an intrinsically disordered protein implicated in many neurodegenerative diseases. The repeat domain fragment of tau, tau-K18, is known to undergo a disorder to order transition in the presence of lipid micelles and vesicles, in which helices form in each of the repeat domains. Here, the mechanism of helical structure formation, induced by a phospholipid mimetic, sodium dodecyl sulfate (SDS) at sub-micellar concentrations, has been studied using multiple biophysical probes. A study of the conformational dynamics of the disordered state, using photoinduced electron transfer coupled to fluorescence correlation spectroscopy (PET-FCS) has indicated the presence of an intermediate state, I, in equilibrium with the unfolded state, U. The cooperative binding of the ligand (L), SDS, to I has been shown to induce the formation of a compact, helical intermediate (IL) within the dead time (∼37 µs) of a continuous flow mixer. Quantitative analysis of the PET-FCS data and the ensemble microsecond kinetic data, suggests that the mechanism of induction of helical structure can be described by a U ↔ I ↔ IL ↔ FL mechanism, in which the final helical state, FL, forms from IL with a time constant of 50-200 µs. Finally, it has been shown that the helical conformation is an aggregation-competent state that can directly form amyloid fibrils.