The anaphase promoting complex (APC) is an E3 ubiquitin ligase required for the metaphase-to-anaphase transition and mitotic exit. However, APC also plays roles in G(1), where it is regulated by Cdh1, and APC activity has also been detected in differentiated and non-proliferating cells, suggesting that it may play roles outside the cell cycle. Here, we report that disrupting APC(Cdh1) activity inhibits neurite outgrowth of both PC12 pheochromocytoma cells and primary cerebellar granule cells. APC(Cdh1) activity dramatically increases as PC12 cells differentiate in response to nerve growth factor. Furthermore, a key target degraded by APC(Cdh1) following nerve growth factor treatment is the F-box protein Skp2, and APC(Cdh1)-mediated destruction of Skp2 is essential for proper terminal differentiation of neuronal precursors.