The Rho family of small GTPases, key regulators of the actin cytoskeleton in eukaryotic cells, is implicated in the control of neuronal morphology. Here, we report that neurotrophin dependent cytoskeletal changes, characteristic of the phenotype of Rac1, in the hippocampal neurons or PC12 cells are inhibited by the disruption of lipid raft integrity. Activation of Rac1 induced by NGF is impaired in cholesterol-depleted PC12 cells. Pretreatment with gammaGTP shifted significant amount of Rac1, presumably in a GTP-bound form, from non-raft to raft fractions. Proper recruitment of activated Rac1 to lipid rafts, structures that represent specialized signaling organelles, is of fundamental importance in determining neurotrophins' bioactivity.