In addition to their prominent role as survival signals for neurons in the developing nervous system, neurotrophins have established their significance in the adult brain as well, where their modulation of synaptic transmission and plasticity may participate in associative learning and memory. These crucial activities are primarily the result of neurotrophin regulation of intracellular Ca2+ homeostasis and, ultimately, changes in gene expression. Outlined in the following review is a synopsis of neurotrophin signaling with a particular focus upon brain-derived neurotrophic factor (BDNF) and its role in hippocampal synaptic plasticity and neuronal Ca2+ homeostasis. Neurotrophin signaling through tropomyosin-related kinase (Trk) and pan-neurotrophin receptor 75 kD (p75NTR) receptors are also discussed, reviewing recent results that indicate signaling through these two receptor modalities leads to opposing cellular outcomes. We also provide an intriguing look into the transient receptor potential channel (TRPC) family of ion channels as distinctive targets of BDNF signaling; these channels are critical for capacitative Ca2+ entry, which, in due course, mediates changes in neuronal structure including dendritic spine density. Finally, we expand these topics into an exploration of mental retardation (MR), in particular Rett Syndrome (RTT), where dendritic spine abnormalities may underlie cognitive impairments. We propose that understanding the role of neurotrophins in synapse formation, plasticity, and maintenance will make fundamental contributions to the development of therapeutic strategies to improve cognitive function in developmental disorders associated with MR.