The local accumulation of phosphatidylinositol (3,4,5) trisphosphate (PIP(3)) and resulting activation of Rac1/Cdc42 play a critical role in nerve growth factor (NGF)-induced neurite outgrowth. To further explore the mechanism, we visualized PIP(3), phosphatidylinositol (3,4) bisphosphate, and Rac1/Cdc42 activities by fluorescence resonance energy transfer (FRET) imaging in NGF-stimulated PC12 cells. Based on the obtained FRET images, and with the help of in silico kinetic reaction model, we predicted that PI-5-phosphatase negatively regulates PIP(3) upon NGF stimulation. In agreement with this model, depletion of Src homology 2 domain-containing inositol polyphosphate 5-phosphatase 2 (SHIP2) markedly potentiated NGF-induced Rac1/Cdc42 activation and PIP(3) accumulation and considerably increased the number and the length of neurites in phosphate and tensin homologue-depleted PC12 cells. Further refinement of the computational model predicted Rac1 regulation of PI3-kinase and SHIP2, which was also validated experimentally. We propose that the SHIP2-mediated negative feedback on PIP(3) coordinately works with the PI3-kinase-mediated positive feedback to form an initial protrusive pattern and, later, to punctuate the PIP(3) accumulation to maintain proper neurite outgrowth.