Addition of the bioactive phospholipid lysophosphatidic acid (LPA) or a thrombin receptor-activating peptide (TRP) to serum-starved N1E-115 or NG108-15 neuronal cells causes rapid growth cone collapse, neurite retraction, and transient rounding of the cell body. These shape changes appear to be driven by receptor-mediated contraction of the cortical actomyosin system independent of classic second messengers. Treatment of the cells with Clostridium botulinum C3 exoenzyme, which ADP-ribosylates and thereby inactivates the Rho small GTP-binding protein, inhibits LPA- and TRP-induced force generation and subsequent shape changes. C3 also inhibits LPA-induced neurite retraction in PC12 cells. Biochemical analysis reveals that the ADP-ribosylated substrate is RhoA. Prolonged C3 treatment of cells maintained in 10% serum induces the phenotype of serum-starved cells, with initial cell flattening being followed by neurite outgrowth; such C3-differentiated cells fail to retract their neurites in response to agonists. We conclude that RhoA is essential for receptor-mediated force generation and ensuing neurite retraction in N1E-115 and PC12 cells, and that inactivation of RhoA by ADP-ribosylation abolishes actomyosin contractility and promotes neurite outgrowth.