Trauma, vascular events, or neurodegenerative processes can lead to axonal injury and eventual transection (axotomy). Neurons can survive axotomy, yet the underlying mechanisms are not fully understood. Excessive water entry into injured neurons poses a particular risk due to swelling and subsequent death. Using in vitro and in vivo neurotrauma model systems based on laser transection and surgical nerve cut, we demonstrated that axotomy triggers actomyosin contraction coupled with calpain activity. As a consequence, neurons shrink acutely to force water out through aquaporin channels preventing swelling and bursting. Inhibiting shrinkage increased the probability of neuronal cell death by about 3-fold. These studies reveal a previously unrecognized cytoprotective response mechanism to neurotrauma and offer a fresh perspective on pathophysiological processes in the nervous system.