Formation of toxic protein aggregates is a common feature and mainly contributes to the pathogenesis of neurodegenerative diseases (NDDs), which include amyotrophic lateral sclerosis (ALS), Alzheimer's, Parkinson's, Huntington's, and prion diseases. The transglutaminase 2 (TG2) gene encodes a multifunctional enzyme, displaying four types of activity, such as transamidation, GTPase, protein disulfide isomerase, and protein kinase activities. Many studies demonstrated that the calcium-dependent transamidation activity of TG2 affects the formation of insoluble and toxic amyloid aggregates that mainly consisted of NDD-related proteins. So far, many important and NDD-related substrates of TG2 have been identified, including amlyoid-β, tau, α-synuclein, mutant huntingtin, and ALS-linked trans-activation response (TAR) DNA-binding protein 43. Recently, the formation of toxic inclusions mediated by several TG2 substrates were efficiently inhibited by TG2 inhibitors. Therefore, the development of highly specific TG2 inhibitors would be an important tool in alleviating the progression of TG2-related brain disorders. In this review, the authors discuss recent advances in TG2 biochemistry, several mechanisms of molecular regulation and pleotropic signaling functions, and the presumed role of TG2 in the progression of many NDDs. [BMB Reports 2018; 51(1): 5-13].