Provided is a reel-out reel-in apparatus that is specifically configured to rapidly deploy and retrieve a towed device such as an aerial decoy towed behind an aircraft. The reel-out reel-in apparatus comprises a spool, a towline wound around the spool and connected to the towed device, a drive mechanism for rotating the spool during retrieval of the towed device, and an electronically controlled levelwind assembly. The levelwind assembly is adapted to evenly distribute the towline across a spool width of the spool during retrieval of the towed device. In addition, the apparatus may include a towline cartridge which integrates the spool, towline and levelwind assembly and a braking mechanism into a single, replaceable unit. The levelwind assembly is adapted to accommodate towlines of variable diameters and is also operative to sever the towline on command by driving the towline into a cutter assembly.