The process of axonal and dendritic development establishes the synaptic circuitry of the central nervous system (CNS) and is the result of interactions between intrinsic molecular factors and the external environment. One growth factor that has a compelling function in neuronal development is the neurotrophin brain-derived neurotrophic factor (BDNF). BDNF participates in axonal and dendritic differentiation during embryonic stages of neuronal development, as well as in the formation and maturation of dendritic spines during postnatal development. Recent studies have also implicated vesicular trafficking of BDNF via secretory vesicles, and both secretory and endosomal trafficking of vesicles containing synaptic proteins, such as neurotransmitter and neurotrophin receptors, in the regulation of axonal and dendritic differentiation, and in dendritic spine morphogenesis. Several genes that are either mutated or deregulated in neurodevelopmental disorders associated with mental retardation have now been identified, and several mouse models of these disorders have been generated and characterized. Interestingly, abnormalities in dendritic and synaptic structure are consistently observed in human neurodevelopmental disorders associated with mental retardation, and in mouse models of these disorders as well. Abnormalities in dendritic and synaptic differentiation are thought to underlie altered synaptic function and network connectivity, thus contributing to the clinical outcome. Here, we review the roles of BDNF and vesicular trafficking in axonal and dendritic differentiation in the context of dendritic and axonal morphological impairments commonly observed in neurodevelopmental disorders associated with mental retardation.