Precise regulation of neurite growth and differentiation determines accurate formation of synaptic connections, whose disruptions are frequently associated with neurological disorders. Dedicator of cytokinesis 4 (Dock4), an atypical guanine nucleotide exchange factor for Rac1, is found to be associated with neuropsychiatric diseases, including autism and schizophrenia. Nonetheless, the neuronal function of Dock4 is only beginning to be understood. Using mouse neuroblastoma (Neuro-2a) cells as a model, this study identifies that Dock4 is critical for neurite differentiation and extension. This regulation is through activation of Rac1 and modulation of the dynamics of actin-enriched protrusions on the neurites. In cultured hippocampal neurons, Dock4 regulates the establishment of the axon-dendrite polarity and the arborization of dendrites, two critical processes during neural differentiation. Importantly, a microdeletion Dock4 mutant linked to autism and dyslexia that lacks the GEF domain leads to defective neurite outgrowth and neuronal polarization. Further analysis reveals that the SH3 domain-mediated interaction of Dock4 is required for its activity toward neurite differentiation, whereas its proline-rich C terminus is not essential for this regulation. Together, our findings reveal an important role of Dock4 for neurite differentiation during early neuronal development.