Axons in the CNS do not regrow after injury, whereas lesioned axons in the peripheral nervous system (PNS) regenerate. Lesioned CNS axons form characteristic swellings at their tips known as retraction bulbs, which are the nongrowing counterparts of growth cones. Although much progress has been made in identifying intracellular and molecular mechanisms that regulate growth cone locomotion and axonal elongation, a comprehensive understanding of how retraction bulbs form and why they are unable to grow is still elusive. Here we report the analysis of the morphological and intracellular responses of injured axons in the CNS compared with those in the PNS. We show that retraction bulbs of injured CNS axons increase in size over time, whereas growth cones of injured PNS axons remain constant. Retraction bulbs contain a disorganized microtubule network, whereas growth cones possess the typical bundling of microtubules. Using in vivo imaging, we find that pharmacological disruption of microtubules in growth cones transforms them into retraction bulb-like structures whose growth is inhibited. Correspondingly, microtubule destabilization of sensory neurons in cell culture induces retraction bulb formation. Conversely, microtubule stabilization prevents the formation of retraction bulbs and decreases axonal degeneration in vivo. Finally, microtubule stabilization enhances the growth capacity of CNS neurons cultured on myelin. Thus, the stability and organization of microtubules define the fate of lesioned axonal stumps to become either advancing growth cones or nongrowing retraction bulbs. Our data pinpoint microtubules as a key regulatory target for axonal regeneration.