During development, axons are guided to their appropriate targets by a variety of guidance factors. On arriving at their synaptic targets, or while en route, axons form branches. Branches generated de novo from the main axon are termed collateral branches. The generation of axon collateral branches allows individual neurons to make contacts with multiple neurons within a target and with multiple targets. In the adult nervous system, the formation of axon collateral branches is associated with injury and disease states and may contribute to normally occurring plasticity. Collateral branches are initiated by actin filament– based axonal protrusions that subsequently become invaded by microtubules, thereby allowing the branch to mature and continue extending. This article reviews the current knowledge of the cellular mechanisms of the formation of axon collateral branches. The major conclusions of this review are (1) the mechanisms of axon extension and branching are not identical; (2) active suppression of protrusive activity along the axon negatively regulates branching; (3) the earliest steps in the formation of axon branches involve focal activation of signaling pathways within axons, which in turn drive the formation of actin-based protrusions; and (4) regulation of the microtubule array by microtubule-associated and severing proteins underlies the development of branches. Linking the activation of signaling pathways to specific proteins that directly regulate the axonal cytoskeleton underlying the formation of collateral branches remains a frontier in the field.