Although NH2-terminal mutant huntingtin (htt) fragments cause neurological disorders in Huntington's disease (HD), it is unclear how toxic htt fragments are generated and contribute to the disease process. Here, we report that complex NH2-terminal mutant htt fragments smaller than the first 508 amino acids were generated in htt-transfected cells and HD knockin mouse brains. These fragments constituted neuronal nuclear inclusions and appeared before neurological symptoms. The accumulation and aggregation of these htt fragments were associated with an age-dependent decrease in proteasome activity and were promoted by inhibition of proteasome activity. These results suggest that decreased proteasome activity contributes to late onset htt toxicity and that restoring the ability to remove NH2-terminal fragments will provide a more effective therapy for HD than inhibiting their production.