The high molecular weight subunits of neurofilaments, NF-H and NF-M, have distinctively long carboxyl-terminal domains that become highly phosphorylated after newly formed neurofilaments enter the axon. We have investigated the functions of this process in normal, unperturbed retinal ganglion cell neurons of mature mice. Using in vivo pulse labeling with [35S]methionine or [32P]orthophosphate and immunocytochemistry with monoclonal antibodies to phosphorylation-dependent neurofilament epitopes, we showed that NF-H and NF-M subunits of transported neurofilaments begin to attain a mature state of phosphorylation within a discrete, very proximal region along optic axons starting 150 microns from the eye. Ultrastructural morphometry of 1,700-2,500 optic axons at each of seven levels proximal or distal to this transition zone demonstrated a threefold expansion of axon caliber at the 150-microns level, which then remained constant distally. The numbers of neurofilaments nearly doubled between the 100- and 150-microns level and further increased a total of threefold by the 1,200-microns level. Microtubule numbers rose only 30-35%. The minimum spacing between neurofilaments also nearly doubled and the average spacing increased from 30 nm to 55 nm. These results show that carboxyl-terminal phosphorylation expands axon caliber by initiating the local accumulation of neurofilaments within axons as well as by increasing the obligatory lateral spacing between neurofilaments. Myelination, which also began at the 150-microns level, may be an important influence on these events because no local neurofilament accumulation or caliber expansion occurred along unmyelinated optic axons. These findings provide evidence that carboxyl-terminal phosphorylation triggers the radial extension of neurofilament sidearms and is a key regulatory influence on neurofilament transport and on the local formation of a stationary but dynamic axonal cytoskeletal network.