The aim of the present study is to investigate the mechanism by which outgrowing rat corticospinal (CS) axons innervate their spinal gray target areas. This study was carried out with the use of anterogradely transported horseradish peroxidase or 1,1-dioctadecyl-3,3,3',3'-tetramethylindocarbocyanine perchlorate (DiI) after application in the sensorimotor cortex of rat pups varying in age between 5 days postnatal (P5) and 10 days postnatal (P10). The CS axons of neurons situated in the sensorimotor cortex have reached the ventral most parts of the dorsal funiculus at mid-lumbar spinal cord levels at the fifth postnatal day (P5). After a waiting period of 2 days some CS fibers change their direction and directly enter the adjacent spinal gray target areas. One day later, i.e., P8, CS target innervation by the formation of collateral branches can be observed. Finally, the development of collaterals by interstitial budding from their parent axons appears to be the major, but not the exclusive, mechanism by which CS axons innervate the lumbar spinal gray matter target area.