The axolotl is a species of tiger salamander that is found the lakes around Mexico City. It is a neotenous species of tiger salamander, retraining its gills throughout its life. It can be stimulated into metamorphosis, if certain hormones are introduced into its system or if it gets iodine treatments. The British naturalist Julian Huxley was among the first to cause metamorphosis in the axolotl using hormones. However, the metamorphosed axolotl is an unhealthy creature that lives only a year or two afterward. This lifespan is greatly shortened from the 10-15 years it would have experienced as a neotenous specimen.
They are found in these lakes, which are polluted, but pollution alone has not killed off the Axolotl. Carp and tilapia have been introduced. These fish have discovered tha Axolotl larvae are a good source of protein, and the axolotl cannot survive this level of predation.
Interestingly, even if this species went extinct in the wild, it would not be extinct in captivity. In fact, you can buy axolotls as pets, which are kept a diet of bloodworms, salmon pellets, and other food for carnivorous fish. It has been in capitivy for so long that different color morphs have been produced, including albino, yellow albino, and leucistic (like the one pictured at the top of the post).
The animal has some cultural significance for Mexican of Aztec ancestry, because the axolotl is the representation of the Aztec deity, Xolotl, the dog-headed deity of death. Xolotl feared he was about to be banished, so he turned himself into the salamander and hid in the lakes. (This story might explain why an unrelated but similar looking species of gilled salamander in the US is called a “water dog.”)
More information can be found here.