Binding of basic fibroblast growth factor (bFGF) and cell adhesion molecules to the nerve cell membrane promotes axon outgrowth. This response can be blocked by antagonists of voltage-gated calcium channels, yet no change of cytosolic calcium concentration in the growth cone can be detected upon binding of the growth factor bFGF or the cell adhesion molecule L1. Using barium as a charge carrier, we show that bFGF and L1 open a calcium influx pathway in growth cones of rat sensory neurons without changing the membrane voltage. L1 does not activate influx in cells expressing a dominant negative mutant of the fibroblast growth factor receptor (FGFR) tyrosine kinase. FGFR-activated influx is blocked by specific antagonists of L- and N-type voltage-gated calcium channels and by an inhibitor of diacylglycerol lipase. We propose that both L1 and bFGF act via the FGFR to generate polyunsaturated fatty acids which in turn cause calcium channels to flicker open and shut. Short-lived domains of raised calcium at the cytosolic mouth of open channels activate axon outgrowth without raising bulk cytosolic calcium concentration. In confirmation of this model, the rapidly-acting calcium buffer BAPTA is significantly more effective at blocking FGF-induced axon outgrowth when compared with the slower buffer EGTA. Generation of short-lived calcium domains may provide a crucial mechanism for axon guidance during development and for promoting regeneration of damaged axons.