Axonal trees display differential growth during development or regeneration; that is, some branches stop growing and often retract while other branches continue to grow and form stable synaptic connections. In this study, an in vitro model of differential growth is examined to identify the intracellular events responsible for this phenomenon. When the giant cerebral neuron of Aplysia californica is placed in culture, vigorous growth occurs from the ends of both branches of its bifurcate axon. If an appropriate target neuron is placed next to one branch, growth from that branch is unabated while growth from the other branch is suppressed. The bidirectional fast transport of membranous organelles was examined in the two branches by the use of high-resolution video microscopy. Transport was similar in the branches in the absence of a target cell but was much greater in the growing than in the nongrowing branch when a target was present. Electron microscopic examination of fixed specimens confirmed these findings. Differential growth may be initiated or sustained by a diversion from certain branches of materials used in growth which are supplied by fast axonal transport.