The CNS-PNS transitional zone of rat cervical ventral rootlets develops in two stages: first, axon segregation, then transitional node formation. This ultrastructural study examines the former. Material was prepared by standard methods. Shortly after they grow out from the neural tube, ventral motoneuron axon bundles are extensively segregated by a matrix of fine processes forming a barrier across the rootlet, just distal to the cord surface. These processes arise from cell clusters on the rootlet surface. This barrier is prominent until the period around birth, when it is replaced by a second in which the axons are completely segregated from one another. The perikarya and processes forming this barrier resemble those of the first, but lie at or just below the cord surface. Thus, beginning at the earliest stage, a barrier crosses the axon bundle and segregates its axons before axon segregation is advanced either in the PNS or (especially) in the CNS. This may prevent central Schwann cell migration. Evidence is presented suggesting that the second barrier may arise through a relative proximal relocation of the first, as the cord grows radially. Near the cord surface, a complete, funnel-shaped sleeve of glial processes surrounds the axon bundle. This is continuous at the cord surface with the glia limitans. It constitutes an integral part of the transitional zone apparatus. It is also continuous centrally with the sheath which enfolds the bundle of ventral motoneuron axons as they run between the ventral horn and the transitional zone. Axon segregation at the cord surface, and therefore the formation of the definitive astrocytic CNS-PNS barrier occur relatively (and perhaps surprisingly) late at the cord surface. The definitive sharp discontinuity of central and peripheral tissue types characteristic of the transitional zone is established only after birth.