The cell-cell adhesion molecule N-cadherin strongly promotes neurite outgrowth in cultured retinal neurons. To test whether cadherins regulate process outgrowth in retinal neurons in vivo, we have blocked cadherin function in single cells by expression of a dominant negative N-cadherin mutant. We report that when cadherin function is inhibited, axon and dendrite outgrowth are severely impaired, particularly in retinal ganglion cells. Laminar migration and cell type specification, by contrast, appear unaffected. Further, expression of the catenin-binding domain of N-cadherin, which blocks cadherin-mediated adhesion in early embryos, does not affect axon outgrowth, suggesting that outgrowth and adhesion are mediated by distinct regions of the cytoplasmic domain. These findings indicate that cadherins play an essential role in the initiation and extension of axons from retinal ganglion cells in vivo.