FoxO proteins are evolutionarily conserved regulators of neuronal structure and function, yet the neuron-specific pathways within which they act are poorly understood. To elucidate neuronal FoxO function in Drosophila melanogaster, we first screened for FoxO’s upstream regulators and downstream effectors. On the upstream side, we present genetic and molecular pathway analyses indicating that the Toll-6 receptor, the Toll/interleukin-1 receptor domain adaptor dSARM, and FoxO function in a linear pathway. On the downstream side, we find that Toll-6–FoxO signaling represses the mitotic kinesin Pavarotti/MKLP1 (Pav-KLP), which itself attenuates microtubule (MT) dynamics. We next probed in vivo functions for this novel pathway and found that it is essential for axon transport and structural plasticity in motoneurons. We demonstrate that elevated expression of Pav-KLP underlies transport and plasticity phenotypes in pathway mutants, indicating that Toll-6–FoxO signaling promotes MT dynamics by limiting Pav-KLP expression. In addition to uncovering a novel molecular pathway, our work reveals an unexpected function for dynamic MTs in enabling rapid activity-dependent structural plasticity.