Mutations in Prkra gene, which encodes PACT/RAX cause early onset primary dystonia DYT-PRKRA, a movement disorder that disrupts coordinated muscle movements. PACT/RAX activates protein kinase R (PKR, aka EIF2AK2) by a direct interaction in response to cellular stressors to mediate phosphorylation of the α subunit of the eukaryotic translation initiation factor 2 (eIF2α). Mice homozygous for a naturally arisen, recessively inherited frameshift mutation, Prkralear-5J exhibit progressive dystonia. In the present study, we investigate the biochemical and developmental consequences of the Prkralear-5J mutation. Our results indicate that the truncated PACT/RAX protein retains its ability to interact with PKR, however, it inhibits PKR activation. Furthermore, mice homozygous for the mutation have abnormalities in the cerebellar development as well as a severe lack of dendritic arborization of Purkinje neurons. Additionally, reduced eIF2α phosphorylation is noted in the cerebellums and Purkinje neurons of the homozygous Prkralear-5J mice. These results indicate that PACT/RAX mediated regulation of PKR activity and eIF2α phosphorylation plays a role in cerebellar development and contributes to the dystonia phenotype resulting from this mutation.