During neuronal circuit formation, neurons move towards their final location while growing axons towards their target. Whereas the biochemical guidance cues involved in neuronal migration and axon elongation are extensively studied, the contribution of mechanical forces in these processes remains largely unexplored in vivo. We analysed the cellular dynamics driving the construction of the olfactory circuit in zebrafish and investigated the mechanical forces involved. We show that the formation of the olfactory circuit occurs during the cell movements that shape the olfactory placodes (OPs), two spheres of neurons that detect odors and transmit the information to the brain through their axons. OP progenitors are initially located in two paired elongated domains surrounding the brain, and progressively coalesce into compact cell clusters. In each domain, cells from the extremities converge towards the centre of the placode by migrating along the brain wall (convergence movements), while central cells move laterally, away from the brain (lateral movements).Surprisingly, axons form during lateral movements through a non-canonical, retrograde mode of extension, where cell bodies move away from axon tips attached to the brain. Functional perturbation of cytoskeleton components, together with observation of protrusive activity and actomyosin dynamics, reveal that convergence movements are active, whereas lateral displacement of cell bodies away from axon tips (retrograde axon extension) appears to be a passive, non-autonomous process. Using nuclei deformation analysis and laser ablation of cell/cell contacts, we characterise an anisotropic mechanical stress in the OP, which further suggests that extrinsic mechanical forces push or pull the cell bodies of OP neurons away from their axon extremities,thereby elongating their axons. Our discovery of passive retrograde axon extension and of extrinsic mechanical inputs as a driving force calls for the analysis of this phenomenon in other regions of the nervous system.