The results of several retrospective clinical studies suggest that exposure to anesthetic agents early in life is correlated with subsequent learning and behavioral disorders. Although ongoing prospective clinical trials may help to clarify this association, they remain confounded by numerous factors. Thus, some of the most compelling data supporting the hypothesis that a relatively short anesthetic exposure can lead to a long-lasting change in brain function are derived from animal models. The mechanism by which such changes could occur remains incompletely understood. Early studies identified anesthetic-induced neuronal apoptosis as a possible mechanism of injury, and more recent work suggests that anesthetics may interfere with several critical processes in brain development. The function of the mature brain requires the presence of circuits, established during development, which perform the computations underlying learning and cognition. In this review, we examine the mechanisms by which anesthetics could disrupt brain circuit formation, including effects on neuronal survival and neurogenesis, neurite growth and guidance, formation of synapses, and function of supporting cells. There is evidence that anesthetics can disrupt aspects of all of these processes, and further research is required to elucidate which are most relevant to pediatric anesthetic neurotoxicity.