Evidence is presented for the differential effects of two isoforms of apolipoprotein (apo) E, apoE3 and apoE4, on neurite outgrowth and on the cytoskeleton of neuronal cells (Neuro-2a) in culture. In the presence of a lipid source, apoE3 enhances and apoE4 inhibits neurite outgrowth. Immunocytochemical studies demonstrate that there is a higher concentration of apoE3 than apoE4 in both the cell bodies and neurites. Cells treated with apoE4 showed fewer microtubules and a greatly reduced ratio of polymerized to monomeric tubulin than did cells treated with apoE3. The effect of apoE4 on depolymerization of microtubules was shown by biochemical, immunocytochemical, and ultrastructural studies. The depolymerization of microtubules and the inhibition of neurite outgrowth associated with apoE4 suggest a mechanism whereby apoE4, which has been linked to the pathogenesis of Alzheimer's disease, may prevent normal neuronal remodeling from occurring later in life, when this neurodegenerative disorder develops.