Harlequin (Hq) mutant mice have progressive degeneration of terminally differentiated cerebellar and retinal neurons. We have identified the Hq mutation as a proviral insertion in the apoptosis-inducing factor (Aif) gene, causing about an 80% reduction in AIF expression. Mutant cerebellar granule cells are susceptible to exogenous and endogenous peroxide-mediated apoptosis, but can be rescued by AIF expression. Overexpression of AIF in wild-type granule cells further decreases peroxide-mediated cell death, suggesting that AIF serves as a free radical scavenger. In agreement, dying neurons in aged Hq mutant mice show oxidative stress. In addition, neurons damaged by oxidative stress in both the cerebellum and retina of Hq mutant mice re-enter the cell cycle before undergoing apoptosis. Our results provide a genetic model of oxidative stress-mediated neurodegeneration and demonstrate a direct connection between cell cycle re-entry and oxidative stress in the ageing central nervous system.