Although neuronal communication is thought to be summated within local dendritic segments, no technique is currently available to monitor activity in vivo at this level of resolution. To overcome this challenge, we developed an optical reporter of neuronal activity using the coding sequence of Venus, flanked by short stretches of the 5'- and 3'-untranslated regions from calcium/calmodulin-dependent kinase IIalpha (CAMKIIalpha). This reporter takes advantage of the fact that CAMKIIalpha mRNA is transported to the dendrite and locally translated in an activity-dependent manner. Using adeno-associated virus, we used this reporter to study neuronal activity in adult mice. Exposure of the mice to an enriched environment led to enhancement of Venus expression in dendritic segments of somatosensory cortex, demonstrating in vivo that dendritic mRNA translocation and local translation occur in response to physiologically relevant stimuli. We then used this system to examine the impact of Alzheimer-related local amyloid-beta deposits on neural system function to test the hypothesis that plaques are toxic. In APPswe/PS1dE9 (APP/PS1) mice, neurons close to plaques, and dendritic segments close to plaques, both showed diminished fluorescent intensity and therefore neuronal activity. In contrast to wild-type mice, fluorescent intensity in neurons near plaques in transgenic mice did not increase after environmental enrichment. These data indicate that neuronal activity in dendritic segments and neurons in the vicinity of a plaque is decreased compared with wild-type mice, supporting the idea that plaques are a focal lesion leading to impaired neural system function.