Huntington Disease (HD) results from polyglutamine expansion within the N-terminus of huntingtin. We have produced yeast artificial chromosome (YAC) transgenic mice expressing normal (YAC18) and mutant (YAC46 and YAC72) human huntingtin in a developmentally appropriate and tissue-specific manner identical to the pattern of expression of endogenous huntingtin. YAC46 and YAC72 mice show early electrophysiological abnormalities indicating neuronal cytoplasmic dysfunction prior to developing nuclear inclusions or neurodegeneration. YAC72 mice display a hyperkinetic movement disorder by 7 months of age, and have evidence for selective and specific degeneration of medium spiny neurons in the lateral striatum by 12 months of age. A key molecular feature of pathology of these YAC72 mice is cleavage of huntingtin in the cytoplasm following by translocation of the resulting huntingtin N-terminal fragments into the nucleus of striatal neurons. Increasing nuclear localization of huntingtin N-terminal fragments within medium spiny neurons of the striatum occurs concomitantly with the onset of selective neurodegeneration. Because huntingtin is a caspase substrate and truncated huntingtin fragments are toxic in vitro, inhibiting caspase cleavage of huntingtin may be of potential therapeutic benefit in HD. We show that caspase inhibitors eliminate huntingtin cleavage in cells and protects them from an apoptotic stress. We also identify caspase-6 and caspase-3 cleavage sites in huntingtin and demonstrate that neuronal and non-neuronal cells expressing a caspase-resistant huntingtin with an expanded polyglutamine tract are less susceptible to apoptosis and aggregate formation. These results suggest that caspase cleavage of huntingtin may be a crucial step in aggregate formation and neurotoxicity in HD.