Monomethyl auristatin E (MMAE) is a potent anti-cancer microtubule-targeting agent (MTA) used as a payload in three approved MMAE-containing antibody drug conjugates (ADCs) and multiple ADCs in clinical development to treat different types of cancers. Unfortunately, MMAE-ADCs can induce peripheral neuropathy, a frequent adverse event leading to treatment dose reduction or discontinuation and subsequent clinical termination of many MMAE-ADCs. MMAE-ADC-induced peripheral neuropathy is attributed to non-specific uptake of the ADC in peripheral nerves and release of MMAE, disrupting microtubules (MTs) and causing neurodegeneration. However, molecular mechanisms underlying MMAE and MMAE-ADC effects on MTs remain unclear. Here, we characterized MMAE-tubulin/MT interactions in reconstituted in vitro soluble tubulin or MT systems and evaluated MMAE and vcMMAE-ADCs in cultured human MCF7 cells. MMAE bound to soluble tubulin heterodimers with a maximum stoichiometry of 1:1, bound abundantly along the length of pre-assembled MTs and with high affinity at MT ends, introduced structural defects, suppressed MT dynamics, and reduced the kinetics and extent of MT assembly while promoting tubulin ring formation. In cells, MMAE and MMAE-ADC (via nonspecific uptake) suppressed proliferation, mitosis and MT dynamics, and disrupted the MT network. Comparing MMAE action to other MTAs supports the hypothesis that peripheral neuropathy severity is determined by the precise mechanism(s) of each individual drug-MT interaction (location of binding, affinity, effects on morphology and dynamics). This work demonstrates that MMAE binds extensively to tubulin and MTs and causes severe MT dysregulation, providing convincing evidence that MMAE-mediated inhibition of MT-dependent axonal transport leads to severe peripheral neuropathy.