RAB35 is a multifunctional small GTPase that regulates endocytic recycling, cytoskeletal rearrangement, and cytokinesis. However, its physiological functions in mammalian development remain unclear. Here, we generated Rab35-knockout mice and found that RAB35 is essential for early embryogenesis. Interestingly, brain-specific Rab35-knockout mice displayed severe defects in hippocampal lamination owing to impaired distribution of pyramidal neurons, although defects in cerebral cortex formation were not evident. In addition, Rab35-knockout mice exhibited defects in spatial memory and anxiety-related behaviors. Quantitative proteomics indicated that the loss of RAB35 significantly affected the levels of other RAB proteins associated with endocytic trafficking, as well as some neural cell adhesion molecules, such as contactin-2. Collectively, our findings revealed that RAB35 is required for precise neuronal distribution in the developing hippocampus by regulating the expression of cell adhesion molecules, thereby influencing spatial memory.