The axon initial segment (AIS) is a key neuronal compartment because it is responsible for action potential initiation. The local density of Na+ channels, the biophysical properties of K+ channels, as well as the length and diameter of the AIS determine the spiking of neurons. These parameters undergo important modifications during development. The development of the AIS is governed by intrinsic mechanisms. In addition, surrounding neuronal networks modify its maturation. As a result, neurons get tuned to particular physiological functions. Neuronal activity also influences the morphology of the mature AIS. When excitatory neurons are hyperactive, their AIS undergo structural changes that decrease their excitability and thereby maintain the activity within a given range. These slow homeostatic regulatory mechanisms occur on a time scale of hours or days. In contrast, the activation of metabotropic receptors modulates the properties of ion channels expressed at the AIS within seconds and consequently produces fast adjustments of neuronal excitability. Recent results suggest that this plasticity plays important roles in physiological functions as diverse as memory formation, hearing, and motor control.