Methamphetamine (METH) selectively injures the neurites of dopamine (DA) neurons, generally without inducing cell death. It has been proposed that METH-induced redistribution of DA from the vesicular storage pool to the cytoplasm, where DA can oxidize to produce quinones and additional reactive oxygen species, may account for this selective neurotoxicity. To test this hypothesis, we used mice heterozygous (+/−) or homozygous (−/−) for the brain vesicular monoamine uptake transporter VMAT2, which mediates the accumulation of cytosolic DA into synaptic vesicles. In postnatal ventral midbrain neuronal cultures derived from these mice, METH-induced degeneration of DA neurites and accumulation of oxyradicals, including metabolites of oxidized DA, varied inversely with VMAT2 expression. METH administration also promoted the synthesis of DA via upregulation of tyrosine hydroxylase activity, resulting in an elevation of cytosolic DA even in the absence of vesicular sequestration. Electron microscopy and fluorescent labeling confirmed that METH promoted the formation of autophagic granules, particularly in neuronal varicosities and, ultimately, within cell bodies of dopaminergic neurons. Therefore, we propose that METH neurotoxicity results from the induction of a specific cellular pathway that is activated when DA cannot be effectively sequestered in synaptic vesicles, thereby producing oxyradical stress, autophagy, and neurite degeneration.