It is generally believed that the mechanism of action of neurotrophic factors involves uptake of neurotrophic factor by nerve terminals and retrograde transport through the axon and back to the cell body where the factor exerts its neurotrophic effect. This view originated with the observation almost 20 years ago that nerve growth factor (NGF) is retrogradely transported by sympathetic axons, arriving intact at the neuronal cell bodies in sympathetic ganglia. However, experiments using compartmented cultures of rat sympathetic neurons have shown that neurite growth is a local response of neurites to NGF locally applied to them which does not directly involve mechanisms in the cell body. Recently, several NGF-related neurotrophins have been identified, and several unrelated molecules have been shown to act as neurotrophic or differentiation factors for a variety of types of neurons in the peripheral and central nervous systems. It has become clear that knowledge of the mechanisms of action of these factors will be crucial to understanding neurodegenerative diseases and the development of treatments as well as the means to repair or minimize neuronal damage after spinal injury. The concepts derived from work with NGF suggest that the site of exposure of a neuron to a neurotrophic factor is important in determining its response.