ALS2 mutations account for a number of recessive motor neuron diseases including forms of amyotrophic lateral sclerosis, primary lateral sclerosis and hereditary spastic paraplegia. Although computational predictions suggest that ALS2 encodes a protein containing multiple guanine nucleotide exchange factor (GEF) domains [RCC1-like domain (RLD), the Dbl homology and pleckstrin homology (DH/PH), and the vacuolar protein sorting 9 (VPS9)], the functions of the ALS2 protein have not been revealed as yet. Here we show that the ALS2 protein specifically binds to small GTPase Rab5 and functions as a GEF for Rab5. Ectopically expressed ALS2 protein localizes with Rab5 and early endosome antigen-1 (EEA1) onto early endosomal compartments and stimulates the enlargement of endosomes in cultured cortical neurons. The carboxy-terminus of ALS2 protein carrying a VPS9 domain mediates not only the activation of Rab5 via a guanine-nucleotide exchanging reaction but also the endosomal localization of the ALS2 protein, while the amino-terminal half containing RLD acts suppressive in its membranous localization. Further, the DH/PH domain in the middle portion of ALS2 protein enhances the VPS9 domain-mediated endosome fusions. Taken together, the ALS2 protein as a novel Rab5-GEF, ALS2rab5GEF seems to be implicated in the endosomal dynamics in vivo. Notably, a feature common to eight reported ALS2 mutations among motor neuron diseases is the loss of VPS9 domain, resulting in the failure of Rab5 activation. Thus, a perturbation of endosomal dynamics caused by loss of ALS2 rab5GEF activity might underlie neuronal dysfunction and degeneration in a number of motor neuron diseases.