There has been a longstanding debate regarding the role of proteolysis in Huntington's disease. The toxic peptide theory posits that N-terminal cleavage fragments of mutant Huntington's disease protein [mutant huntingtin (mhtt)] enter the nucleus to cause transcriptional dysfunction. However, recent data suggest a second model in which proteolysis of full-length mhtt is inhibited. Importantly, the two competing theories differ with respect to subcellular distribution of mhtt at initiation of toxicity: nuclear if cleaved and cytoplasmic in the absence of cleavage. Using quantitative single-cell analysis and time-lapse imaging, we show here that transcriptional dysfunction is “downstream” of cytoplasmic dysfunction. Primary and reversible toxic events involve destabilization of microtubules mediated by full-length mhtt before cleavage. Restoration of microtubule structure by taxol inhibits nuclear entry and increases cell survival.