Neurotrophins have diverse functions in the CNS. Initially synthesized as precursors (proneurotrophins), they are cleaved to produce mature proteins, which promote neuronal survival and enhance synaptic plasticity by activating Trk receptor tyrosine kinases. Recent studies indicate that proneurotrophins serve as signalling molecules by interacting with the p75 neurotrophin receptor (p75^NTR). Interestingly, proneurotrophins often have biological effects that oppose those of mature neurotrophins. Therefore, the proteolytic cleavage of proneurotrophins represents a mechanism that controls the direction of action of neurotrophins. New insights into the 'yin and yang' of neurotrophin activity have profound implications for our understanding of the role of neurotrophins in a wide range of cellular processes.