While the neurotrophin receptor p75NTR is expressed by many developing neurons, its function in cells escaping elimination by programmed cell death remains unclear. The lack of intrinsic enzymatic activity of p75NTR prompted a search for protein interactors expressed in the developing retina, which resulted in the identification of the GTPase RhoA. In transfected cells, p75NTR activated RhoA, and neurotrophin binding abolished RhoA activation. In cultured neurons, inactivation of Rho proteins mimicked the effect of neurotrophins by increasing the rate of neurite elongation. In vivo, axonal outgrowth was retarded in mice carrying a mutation in the p75NTR gene. These results indicate that p75NTR modulates in a ligand-dependent fashion the activity of intracellular proteins known to regulate actin assembly.