More than half of the dorsal root ganglion (DRG) neurons are lost by excessive cell death coinciding with precursor proliferation and cell cycle exit in neurotrophin-3 null mutant (NT-3^−/−) mice. We find that in the absence of NT-3, sensory precursor cells fail to arrest the cell cycle, override the G1 phase restriction point, and die by apoptosis in S phase, which can be prevented in vivo by a cell cycle blocker. Uncoordinated cell cycle reentry is preceded by a failure of nuclear N-myc downregulation and is paralleled by the activation of the full repertoire of G1 and S phase cell cycle proteins required for cell cycle entry. Our results provide evidence for novel activity of neurotrophins in cell cycle control and point toward an N-myc sensitization to cell death in the nervous system that is under the control of NT-3.