The mammalian acetylcholinesterase (ACHE) gene gives rise to diverse enzymatically active proteins with three different carboxyl termini. In the brain, the normally rare readthrough AChE-R monomer accumulates under embryonic development and in adults following psychological stress, head injury, or exposure to AChEs. In the prenatal developing cortex, its unique C-terminal peptide ARP associates with radial glial fibers supporting neuronal migration. In contrast, the major synaptic AChE-S variant appears in the migrating neurons themselves. Moreover, antisense suppression of AChE-R attenuates neuronal migration, allowing increased proliferation of neuronal progenitors. In the adult brain, neuronal AChE-R is either secreted or accumulates intraneuronally, where it interacts through ARP with the scaffold protein RACK1 and activated PKC-betaII. This associates with increased PKC-betaII activity, which shuttles to submembranal clusters (e.g., in hyperactivated hippocampal neurons). Cleavage yields the AChE-R-specific C-terminal peptide, including immunopositive ARP. Importantly, intrahippocampal injection of synthetic ARP was followed by its efficient neuronal penetration and retrograde transport into cortical and basal nuclei neurons. Moreover, ARP-injected mice presented increased stress-induced contextual fear, inhibitable by antisense suppression of AChE-R mRNA. Together, our findings point at the cleavable ARP peptide as a key regulator of neuronal development and plasticity and suggest its use as a drug target and/or research and therapeutic tool.