Disrupting particular mitochondrial fission and fusion proteins leads to the death of specific neuronal populations; however, the normal functions of mitochondrial fission in neurons are poorly understood, especially in vivo, which limits the understanding of mitochondrial changes in disease. Altered activity of the central mitochondrial fission protein dynamin-related protein 1 (Drp1) may contribute to the pathophysiology of several neurologic diseases. To study Drp1 in a neuronal population affected by Alzheimer's disease (AD), stroke, and seizure disorders, we postnatally deleted Drp1 from CA1 and other forebrain neurons in mice (CamKII-Cre, Drp1lox/lox (Drp1cKO)). Although most CA1 neurons survived for more than 1 year, their synaptic transmission was impaired, and Drp1cKO mice had impaired memory. In Drp1cKO cell bodies, we observed marked mitochondrial swelling but no change in the number of mitochondria in individual synaptic terminals. Using ATP FRET sensors, we found that cultured neurons lacking Drp1 (Drp1KO) could not maintain normal levels of mitochondrial-derived ATP when energy consumption was increased by neural activity. These deficits occurred specifically at the nerve terminal, but not the cell body, and were sufficient to impair synaptic vesicle cycling. Although Drp1KO increased the distance between axonal mitochondria, mitochondrial-derived ATP still decreased similarly in Drp1KO boutons with and without mitochondria. This indicates that mitochondrial-derived ATP is rapidly dispersed in Drp1KO axons, and that the deficits in axonal bioenergetics and function are not caused by regional energy gradients. Instead, loss of Drp1 compromises the intrinsic bioenergetic function of axonal mitochondria, thus revealing a mechanism by which disrupting mitochondrial dynamics can cause dysfunction of axons.