Neurofascin and NrCAM are two axon-associated transmembrane glycoproteins belonging to the L1 subgroup of the Ig superfamily. In this study, we have analyzed the interaction of both proteins using neurite outgrowth and binding assays. A neurofascin-Fc chimera was found to stimulate the outgrowth of tectal cells when immobilized on an inert surface but not as a soluble form using polylysine as substrate. Antibody blocking experiments demonstrate that neurite extension on immobilized neurofascin is mediated by NrCAM on the axonal surface. Under the reverse experimental conditions where NrCAM induces neurite extension, F11, and not neurofascin, serves as axonal receptor. Binding studies using transfected COS7 cells and immunoprecipitations reveal a direct interaction between neurofascin and NrCAM. This binding activity was mapped to the Ig domains within neurofascin. The neurofascin-NrCAM binding can be modulated by alternative splicing of specific stretches within neurofascin. These studies indicate that heterophilic interactions between Ig-like proteins implicated in axonal extension underlie a regulation by the neuron.