Familial Dysautonomia (FD) is a neurodegenerative disease in which aberrant tissue-specific splicing of IKBKAP exon 20 leads to reduction of IKAP protein levels in neuronal tissues. Here we generated a conditional knockout (CKO) mouse in which exon 20 of IKBKAP is deleted in the nervous system. The CKO FD mice exhibit developmental delays, sensory abnormalities, and less organized dorsal root ganglia (DRGs) with attenuated axons compared to wild-type mice. Furthermore, the CKO FD DRGs show elevated HDAC6 levels, reduced acetylated α-tubulin, unstable microtubules, and impairment of axonal retrograde transport of nerve growth factor (NGF). These abnormalities in DRG properties underlie neuronal degeneration and FD symptoms. Phosphatidylserine treatment decreased HDAC6 levels and thus increased acetylation of α-tubulin. Further PS treatment resulted in recovery of axonal outgrowth and enhanced retrograde axonal transport by decreasing histone deacetylase 6 (HDAC6) levels and thus increasing acetylation of α-tubulin levels. Thus, we have identified the molecular pathway that leads to neurodegeneration in FD and have demonstrated that phosphatidylserine treatment has the potential to slow progression of neurodegeneration.