An early and essential step in the formation of functional neuronal circuits is the establishment of cell polarity, a process involving the morphological and functional differentiation of the axon (axonogenesis). We now report that treatment of cultured embryonic hippocampal neurons with ethidium bromide (EtBr; an agent that depletes mitochondrial DNA), prior to the establishment of cell polarity, prevents axon formation while permitting outgrowth of minor processes. The polarity-suppressing action of EtBr occurs under conditions of maintained cellular ATP levels, and is not mimicked by ATP-depleting agents (iodoacetate, p-(trifluoromethyoxy)phenylhydrazone [FCCP], and cyanide). Levels of tau, a microtubule-associated protein involved in axonogenesis, were not decreased in neurons treated with EtBr. Electron and confocal microscope analyses showed that EtBr treatment altered mitochondrial ultrastructure and subcellular localization. Basal levels of intracellular calcium were elevated 2- to 3-fold, intramitochondrial calcium levels were greatly increased, and mitochondrial transmembrane potential was decreased in EtBr-treated neurons. Exposure of neurons to a calcium ionophore prevented axonogenesis. Confocal images of intracellular calcium levels and mitochondrial localization in the same cells revealed congregations of mitochondria at the base of the axon associated with local reductions of intracellular calcium levels. When taken together with previous data indicating important roles for calcium in regulating neurite outgrowth, the present findings suggest critical roles for mitochondrial function and modulation of calcium homeostasis in the establishment of neuronal polarity.