Human metallothionein-III (MT-III) is an inhibitory factor deficient in the Alzheimer's disease (AD) brain. MT-III has been identified as an inhibitor of neurite sprouting, and its deficiency has been proposed to be involved in the formation of neurofibrillary tangles (NFT) in the neuropathology of AD. However, there has been limited investigation of the proposed neurite growth inhibitory properties of MT-III. We have applied recombinant human MT-III to both single cell embryonic cortical neurons (to investigate initial neurite formation), as well as mature (21 days postplating) clusters of cortical neurons (to investigate the regenerative sprouting response following injury). We report that MT-III inhibited the initial formation of neurites by rat embryonic (E18) cortical neurons. This was based on both the percentage of neurite positive neurons and the number of neurites per neuron (45 and 30% inhibition, respectively). Neurite inhibition was only observed in the presence of adult rat brain extract, and was also reversible following replacement of MT-III-containing medium. MT-III inhibited the formation and growth of both axons and dendrites. Of more physiological significance, MT-III also inhibited the regenerative neurite sprouting response following axonal transection. The morphology of sprouting neurites was also altered, with the distal tip often ending in bulb-like structures. Based on these results, we propose that MT-III, in the presence of brain extract, is a potent inhibitor of neurite sprouting, and may be involved in abnormal sprouting potentially underlying both AD and epilepsy.