The dynamics of synaptic vesicles (SVs) during the development of presynaptic specializations in cultured Xenopus spinal cord neurons was studied with the fluorescent vesicular probe FM1-43. In naive neurons that have not contacted synaptic targets, packets of SVs are distributed along the entire neurite and are quite mobile. The interaction with the synaptic target, such as a muscle cell or a latex bead coated with basic fibroblast growth factor, results in the localization and immobilization of SV packets at the contact site. Depolarization resulted in exocytosis of SVs in both naive and target-contacted neurites. Okadaic acid, a phosphatase inhibitor, caused a dispersal of SV packets in both naive and target-contacted neurites. Thus, prior to target contact, SVs are already organized into packets capable of release and recycling by a phosphorylation-dependent mechanism. Target interaction then recruits and anchors these functional SV packets into forming the presynaptic nerve terminal. With fluorescent phalloidin as a probe, F-actin was found to colocalize with SV clusters at bead-neurite contacts. Although okadaic acid caused a dispersal of SVs at the beads, F-actin localization there was relatively resistant to this drug treatment. This suggests that SVs become localized at the target by interacting with an actin-based cytoskeletal specialization in a phosphorylation-sensitive manner. The induction of this cytoskeletal specialization by the target may be an early event in presynaptic differentiation.