The development of AVEC-DIC microscopy and the application of this method to the study of fast axonal transport in isolated axoplasm extruded from the giant axon of the squid Loligo pealei provides a new paradigm for analyzing the intracellular transport of membranous organelles. The size of the axon, the number of transported particles, and the absence of permeability barriers like the plasma membrane in this preparation permit many experiments that are difficult or impossible to perform using other model systems. The use and features of this preparation are described in detail and a number of properties are evaluated for the first time. The process of extrusion is characterized. Particle movement is evaluated both in the interior of extruded axoplasm and along individual fibrils that extend from the periphery of perfused axoplasm. The role of divalent cations, particularly Ca2+, and the effects of elevated Ca2+ on axoplasmic organization and transport are analyzed. A series of pharmacological agents and polypeptides that alter cytoskeletal organization are used to examine the role of microfilaments and microtubules in fast transport. Finally, the effects of depleting ATP and of adding ATP analogues are discussed. The extruded axoplasm preparation is shown to be an invaluable model system for biochemical and pharmacological analyses of the molecular mechanisms of intracellular transport.