NGF (nerve growth factor) and tissue transglutaminase (TG2) play important roles in neurite outgrowth and modulation of neuronal cell survival. In this study, we investigated the regulation of TG2 transamidase activity by NGF in retinoic acid-induced differentiating mouse N2a and human SH-SY5Y neuroblastoma cells. TG2 transamidase activity was determined using an amine incorporation and a peptide cross linking assay. In situ TG2 activity was assessed by visualising the incorporation of biotin-X-cadaverine using confocal microscopy. The role of TG2 in NGF-induced cytoprotection and neurite outgrowth was investigated by monitoring hypoxia-induced cell death and appearance of axonal-like processes, respectively. The amine incorporation and protein crosslinking activity of TG2 increased in a time and concentration-dependent manner following stimulation with NGF in N2a and SH-SY5Y cells. NGF mediated increases in TG2 activity were abolished by the TG2 inhibitors Z-DON (Z-ZON-Val-Pro-Leu-OMe; Benzyloxycarbonyl-(6-Diazo-5-oxonorleucinyl)-l-valinyl-l-prolinyl-l-leucinmethylester) and R283 (1,3,dimethyl-2[2-oxo-propyl]thio)imidazole chloride) and by pharmacological inhibition of extracellular signal-regulated kinases 1 and 2 (ERK1/2), protein kinase B (PKB) and protein kinase C (PKC), and removal of extracellular Ca2+. Fluorescence microscopy demonstrated NGF induced in situ TG2 activity. TG2 inhibition blocked NGF-induced attenuation of hypoxia-induced cell death and neurite outgrowth in both cell lines. Together, these results demonstrate that NGF stimulates TG2 transamidase activity via a ERK1/2, PKB and PKC-dependent pathway in differentiating mouse N2a and human SH-SY5Y neuroblastoma cells. Furthermore, NGF-induced cytoprotection and neurite outgrowth are dependent upon TG2. These results suggest a novel and important role of TG2 in the cellular functions of NGF.