The essential function of the circulatory system is to continuously and efficiently supply the O₂ and nutrients necessary to meet the metabolic demands of every cell in the body, a function in which vast capillary networks play a key role. Capillary networks serve an additional important function in the central nervous system: acting as a sensory network, they detect neuronal activity in the form of elevated extracellular K⁺ and initiate a retrograde, propagating, hyperpolarizing signal that dilates upstream arterioles to rapidly increase local blood flow. Yet, little is known about how blood entering this network is distributed on a branch-to-branch basis to reach specific neurons in need. Here, we demonstrate that capillary-enwrapping projections of junctional, contractile pericytes within a postarteriole transitional region differentially constrict to structurally and dynamically determine the morphology of capillary junctions and thereby regulate branch-specific blood flow. We further found that these contractile pericytes are capable of receiving propagating K⁺-induced hyperpolarizing signals propagating through the capillary network and dynamically channeling red blood cells toward the initiating signal. By controlling blood flow at junctions, contractile pericytes within a functionally distinct postarteriole transitional region maintain the efficiency and effectiveness of the capillary network, enabling optimal perfusion of the brain.