Neurodegenerative diseases cause local brain lesions as well as denervation of neurons in areas connected to the lesion site. In part, the denervation-induced damage associated with brain lesions can be homeostatically compensated by network reorganization. To study the dynamics of compensatory changes occurring in denervated brain areas, we established an in vitro denervation model based on organotypic slice cultures of mouse entorhinal cortex and hippocampus. In these cultures, the entorhino-dentate projection was transected and denervation-induced changes of tdTomato-labeled dentate granule cells were monitored over time. Changes of the dendritic arbor as well as denervation-induced spine changes of single identified granule cells were captured simultaneously using a highly stable confocal imaging setup. As previously described, granule cells showed rapid and layer-specific reductions in spine density, followed by a gradual recovery over time. Dendritic retraction began within the same time window and the correlation of dendritic length changes and changes in spine numbers revealed that dendritic retraction contributed to the postlesional recovery of dendritic spine density. Since neurons remodel their dendritic arbor depending on the number of available synapses to achieve firing-rate homeostasis, our findings suggest that the retraction of denervated dendritic segments is a homeostatic mechanism contributing to the speed of spine density recovery and the return of function.