The small GTPase Rheb was originally detected as an immediate early response protein whose expression was induced by NMDA-dependent synaptic activity in the brain. Rheb’s activity is highly regulated by its GTPase activating protein (GAP), the tuberous sclerosis complex protein, which stimulates the conversion from the active, GTP-loaded into the inactive, GDP-loaded conformation. Rheb has been established as an evolutionarily conserved molecular switch protein regulating cellular growth, cell volume, cell cycle, autophagy, and amino acid uptake. The subcellular localization of Rheb and its interacting proteins critically regulate its activity and function. In stem cells, constitutive activation of Rheb enhances differentiation at the expense of self-renewal partially explaining the adverse effects of deregulated Rheb in the mammalian brain. In the context of various cellular stress conditions such as oxidative stress, ER-stress, death factor signaling, and cellular aging, Rheb activation surprisingly enhances rather than prevents cellular degeneration. This review addresses cell type- and cell state-specific function(s) of Rheb and mainly focuses on neurons and their surrounding glial cells. Mechanisms will be discussed in the context of therapy that interferes with Rheb’s activity using the antibiotic rapamycin or low molecular weight compounds.