Actin cytoskeleton dynamics is crucial for neurogenesis and neuronal function. Precise quantitative and qualitative regulation of actin polymerization is achieved by multiple actin-binding proteins, among which formins are particularly versatile. Here, we investigate how neuronal-specific splicing expands formin's functional diversity in the brain. We uncovered a highly conserved microexon in DAAM1, whose inclusion extends the linker region of the FH2 domain, and leads to remarkable changes in actin polymerization rates and structure. Microexon deletion causes neuritogenesis defects and increased calcium influx in in vitro differentiated neurons, and mice carrying this deletion exhibit deficient memory formation. These memory defects were associated with higher activity of DAAM1's interactor RhoA, increased ARC protein levels, postsynaptic deficiencies, fewer dendritic spines and impaired long-term potentiation. In summary, precise post-transcriptional regulation of DAAM1's FH2 domain is a novel mechanism for modulating actin dynamics in neurons, and is essential for proper brain function.