Nijmegen breakage syndrome (NBS) is an autosomal recessive disorder, characterized by progressive microcephaly, growth retardation, immunodeficiency, and pre-disposition to tumor formation. To investigate the functions of the NBS gene product, NBS1, on neurons, PC12 cells overexpressing NBS1 and related mutants and primary cortical neuronal culture were used in the present study. Small interfering RNA (siRNA) was applied to repress the expression of endogenous Nbs1 in PC12 cells and primary cortical neurons. We demonstrated that overexpression of NBS1 increases cellular proliferation and decreases the apoptosis of PC12 cells in serum withdrawal and ionizing irradiation, through the activation of phosphatidylinositol 3-kinase (PI 3-kinase)/Akt pathway. Overexpression of NBS1 also decreases neurite elongation on PC12 cells under nerve growth factor stimulation. Transfection of NBS1-overexpressing PC12 cells with a dominant negative Akt mutant attenuates the neuroprotection and cellular proliferation effects of NBS1 while having no effect on neurite elongation. PC12 cells overexpressing NBS657del5 and NBS653 mutants, in which the major NBS1 protein in cells are truncated proteins, have decreased cellular proliferation, increased cell death, and decreased neurite elongation compared with those of control PC12 cells. Repression of Nbs1 by siRNA decreases the PI 3-kinase activity and Akt phosphorylation levels, and induces neurite elongation in PC12 cells even without nerve growth factor stimulation. Repression of Nbs1 by siRNA in primary cortical neurons also increased neurite elongation, but increased neuronal death. We conclude that NBS1 can regulate neuronal proliferation and neuroprotection via PI 3-kinase/Akt pathway while regulating neuronal differentiation in a different pathway. Excessive accumulation of truncated protein secondary to 657del5 mutation may be detrimental to neurons, leading to defective neuronal proliferation and differentiation.