Neuritic abnormalities are a major hallmark of Alzheimer's disease (AD) pathology. Accumulation of beta-amyloid protein (Abeta) in the brain causes changes in neuritic processes in individuals with this disease. In this study, we show that Abeta decreases neurite outgrowth from SH-SY5Y human neuroblastoma cells. To explore molecular pathways by which Abeta alters neurite outgrowth, we examined the activation and localization of RhoA and Rac1 which regulate the level and phosphorylation of the collapsin response mediator protein-2 (CRMP-2). Abeta increased the levels of the GTP-bound (active) form of RhoA in SH-SY5Y cells. This increase in GTP-RhoA correlated with an increase in an alternatively spliced form of CRMP-2 (CRMP-2A) and its threonine phosphorylated form. Both a constitutively active form of Rac1 (CA-Rac1) and the Rho kinase inhibitor, Y27632, decreased levels of the CRMP-2A variant and decreased threonine phosphorylation caused by Abeta stimulation. The amount of tubulin bound to CRMP-2 was decreased in the presence of Abeta but Y27632 increased the levels of tubulin bound to CRMP-2. Increased levels of both RhoA and CRMP-2 were found in neurons surrounding amyloid plaques in the cerebral cortex of the APP(Swe) Tg2576 mice. We found that there was an increase in threonine phosphorylation of CRMP-2 in Tg2576 mice and the increase correlated with a decrease in the ability of CRMP-2 to bind tubulin. The results suggest that Abeta-induced neurite outgrowth inhibition may be initiated through a mechanism in which Abeta causes an increase in Rho GTPase activity which, in turn, phosphorylates CRMP-2 to interfere with tubulin assembly in neurites.