The amyloid-beta 42 (Abeta42) is thought to play a central role in the pathogenesis of Alzheimer's disease (AD). However, the molecular mechanisms by which Abeta42 induces neuronal dysfunction and degeneration remain elusive. Mitochondrial dysfunctions are implicated in AD brains. Whether mitochondrial dysfunctions are merely a consequence of AD pathology, or are early seminal events in AD pathogenesis remains to be determined. Here, we show that Abeta42 induces mitochondrial mislocalization, which contributes to Abeta42-induced neuronal dysfunction in a transgenic Drosophila model. In the Abeta42 fly brain, mitochondria were reduced in axons and dendrites, and accumulated in the somata without severe mitochondrial damage or neurodegeneration. In contrast, organization of microtubule or global axonal transport was not significantly altered at this stage. Abeta42-induced behavioral defects were exacerbated by genetic reductions in mitochondrial transport, and were modulated by cAMP levels and PKA activity. Levels of putative PKA substrate phosphoproteins were reduced in the Abeta42 fly brains. Importantly, perturbations in mitochondrial transport in neurons were sufficient to disrupt PKA signaling and induce late-onset behavioral deficits, suggesting a mechanism whereby mitochondrial mislocalization contributes to Abeta42-induced neuronal dysfunction. These results demonstrate that mislocalization of mitochondria underlies the pathogenic effects of Abeta42 in vivo.