Perturbation of the homeostasis between proteases and their inhibitors has been associated with lesion-induced or degenerative neuronal changes. Protease nexin-1 (PN-1), a secreted serine protease inhibitor, is constitutively expressed in distinct neuronal cell populations of the adult CNS. In an earlier study we showed that transgenic mice with ectopic or increased expression of PN-1 in postnatal neurons have altered synaptic transmission. Here these mice are used to examine the impact of an extracellular proteolytic imbalance on long-term neuronal function. These mice develop disturbances in motor behavior from 12 weeks on, with some of the histopathological changes described in early stages of human motor neuron disease, and neurogenic muscle atrophy in old age. In addition, sensorimotor integration, measured by epicranial multichannel recording of sensory evoked potentials, is impaired. Our results suggest that axonal dysfunction rather than cell death underlies these phenotypes. In particular, long projecting neurons, namely cortical layer V pyramidal and spinal motor neurons, show an age-dependent vulnerability to PN-1 overexpression. These mice can serve to study early stages of in vivo neuronal dysfunction not yet associated with cell loss.