Axon/dendrite differentiation is a critical step in neuronal development. In cultured hippocampal neurons, the accumulation of LKB1 and STRAD, two interacting proteins critical for establishing epithelial polarity, in an undifferentiated neurite correlates with its subsequent axon differentiation. Downregulation of either LKB1 or STRAD by siRNAs prevented axon differentiation, and overexpression of these proteins led to multiple axon formation. Furthermore, interaction of STRAD with LKB1 promoted LKB1 phosphorylation at a PKA site S431 and elevated the LKB1 level, and overexpressing LKB1 with a serine-to-alanine mutation at S431 (LKB1^S431A) prevented axon differentiation. In developing cortical neurons in vivo, downregulation of LKB1 or overexpression of LKB1^S431A also abolished axon formation. Finally, local exposure of the undifferentiated neurite to brain-derived neurotrophic factor or dibutyryl-cAMP promoted axon differentiation in a manner that depended on PKA-dependent LKB1 phosphorylation. Thus local LKB1/STRAD accumulation and PKA-dependent LKB1 phosphorylation represents an early signal for axon initiation.