N6-methyladenosine (m6A) is a reversible modification in mRNA and has been shown to regulate processing, translation and decay of mRNA. However, the roles of m6A modification in neuronal development are still not known. Here, we found that the m6A eraser FTO is enriched in axons and can be locally translated. Axon-specific inhibition of FTO by rhein, or compartmentalized siRNA knockdown of Fto in axons led to increases of m6A levels. GAP-43 mRNA is modified by m6A and is a substrate of FTO in axons. Loss-of-function of this non-nuclear pool of FTO resulted in increased m6A modification and decreased local translation of axonal GAP-43 mRNA, which eventually repressed axon elongation. Mutation of a predicted m6A site in GAP-43 mRNA eliminated its m6A modification and exempted regulation of its local translation by axonal FTO. This work showed an example of dynamic internal m6A demethylation of non-nuclear localized mRNA by the demethylase FTO. Regulation of m6A modification of axonal mRNA by axonal FTO might be a general mechanism to control their local translation in neuronal development.