Adolescence is characterized by vulnerability to the development of neuropsychiatric disorders including drug addiction, as well as prefrontal cortical refinement that culminates in structural stability in adulthood. Neuronal refinement and stabilization are hypothesized to confer resilience to poor decision making and addictive-like behaviors, although intracellular mechanisms are largely unknown. We characterized layer V prefrontal dendritic spine development and refinement in adolescent wild-type mice and mice lacking the cytoskeletal regulatory protein Abl-related gene (Arg) kinase. Relative to hippocampal CA1 pyramidal neurons, which exhibited a nearly linear increase in spine density up to postnatal day 60 (P60), wild-type prefrontal spine density peaked at P31, and then declined by 18% by P56-P60. In contrast, dendritic spines in mice lacking Arg destabilized by P31, leading to a net loss in both structures. Destabilization corresponded temporally to the emergence of exaggerated psychomotor sensitivity to cocaine. Moreover, cocaine reduced dendritic spine density in wild-type orbitofrontal cortex and enlarged remaining spine heads, but arg_/_spines were unresponsive. Local application of Arg or actin polymerization inhibitors exaggerated cocaine sensitization, as did reduced gene dosage of the Arg substrate, p190RhoGAP. Genetic and pharmacological Arg inhibition also retarded instrumental reversal learning and potentiated responding for reward-related cues, providing evidence that Arg regulates both psychomotor sensitization and decision-making processes implicated in addiction. These findings also indicate that structural refinement in the adolescent orbitofrontal cortex mitigates psychostimulant sensitivity and support the emerging perspective that the structural response to cocaine may, at any age, have behaviorally protective consequences.