Endocannabinoids, particularly 2-arachidonoyl glycerol (2-AG), impact the directional turning and motility of a developing axon by activating CB₁ cannabinoid receptors (CB₁Rs) in its growth cone. Recent findings posit that sn-1-diacylglycerol lipases (DAGLα/β) synthesize 2-AG in the motile axon segment of developing pyramidal cells. Coincident axonal targeting of CB₁Rs and DAGLs prompts the hypothesis that autocrine 2-AG signaling facilitates axonal outgrowth. However, DAGLs alone are insufficient to account for the spatial specificity and dynamics of 2-AG signaling. Therefore, we hypothesized that local 2-AG degradation by monoacylglycerol lipase (MGL) must play a role. We determined how subcellular recruitment of MGL is temporally and spatially restricted to establish the signaling competence of 2-AG during axonal growth. MGL is expressed in central and peripheral axons of the fetal nervous system by embryonic day 12.5. MGL coexists with DAGLα and CB₁Rs in corticofugal axons of pyramidal cells. Here, MGL and DAGLα undergo differential axonal targeting with MGL being excluded from the motile neurite tip. Thus, spatially confined MGL activity generates a 2-AG-sensing microdomain and configures 2-AG signaling to promote axonal growth. Once synaptogenesis commences, MGL disperses in stationary growth cones. The axonal polarity of MGL is maintained by differential proteasomal degradation because inhibiting the ubiquitin proteasome system also induces axonal MGL redistribution. Because MGL inactivation drives a CB₁R-dependent axonal growth response, we conclude that 2-AG may act as a focal protrusive signal for developing neurons and whose regulated metabolism is critical for attaining correct axonal complexity.