The kinesin superfamily motor protein KIF1B has been shown to transport mitochondria. Here, we describe an isoform of KIF1B, KIF1B beta, that is distinct from KIF1B in its cargo binding domain. KIF1B knockout mice die at birth from apnea due to nervous system defects. Death of knockout neurons in culture can be rescued by expression of the beta isoform. The KIF1B heterozygotes have a defect in transporting synaptic vesicle precursors and suffer from progressive muscle weakness similar to human neuropathies. Charcot-Marie-Tooth disease type 2A was previously mapped to an interval containing KIF1B. We show that CMT2A patients contain a loss-of-function mutation in the motor domain of the KIF1B gene. This is clear indication that defects in axonal transport due to a mutated motor protein can underlie human peripheral neuropathy.