A cardinal feature of neurons is the morphological polarity of neurons with serious functional implications. Typically, a neuron has a single axon and several dendrites. Neuronal polarity is essential for the unidirectional signal flow from somata or dendrites to axons in neurons. The initial event in establishing a polarized neuron is the specification of a single axon. Although researchers are accumulating a catalog of structural, molecular, and functional differences between axons and dendrites, we are only now beginning to understand the molecular mechanisms involved in the establishment of neuronal polarity. We have described recent advances in the understanding of cellular events in the early development of an axon and dendrites. Several groups, including ours, reported that the phosphatidylinositol 3-kinase (PI3-kinase)/Akt (also called protein kinase B)/glycogen synthase kinase-3beta (GSK-3beta)/collapsin response mediator protein-2 (CRMP-2) pathway is important for axon specification and elongation. Recent studies have revealed the roles that Rho family small GTPases, the Par complex, and cytoskeleton-related proteins play in the initial events of neuronal polarization downstream of PI3-kinase. We discuss the roles of polarity-regulating molecules and the potential mechanisms underlying the specification of an axon and dendrites. Polarity-regulating molecules participate in various neuronal disorders. In this review, the signal transduction of GSK-3beta and CRMP-2 is introduced as a new target for the treatment of Alzheimer's disease (AD) and nerve injury. These findings may help clarify causes of and treatments aimed at reversing AD and nerve injury.