Long-term facilitation of sensorimotor synapses of Aplysia in culture by serotonin (5-HT) is accompanied by two changes: an increase in the number of sensory cell branches and varicosities contacting the major axons of the target motor cell L7, and a downregulation of Aplysia cell adhesion molecules (apCAM) from the surface of the presynaptic sensory cell. We tested the hypothesis that the two changes may be linked; the 5-HT-induced decrease of apCAM levels from sensory neurites may defasciculate sensory neurites from each other and make the surface of the motor axons a more attractive substrate for new growth and synapses. We used developing cultures to examine the relationship of neuritic branching, varicosity formation, and efficacy of the connections formed by sensory cells to levels of apCAM expression on the motor cell. We then determined the consequences of 5-HT applied during the early period of interaction between sensory and motor cells (day 1 or 2 in culture) on the pattern of sensory cell growth and synapse formation. We report that the number of sensory cell branches and varicosities, and the ability of sensory growth cones to fasciculate with L7 axons and form chemical connections correlate with the level of apCAM expression on different regions of L7. Early exposure to 5-HT increased the number of sensory cell branches and varicosities contacting newly regenerated distal neurites of L7 to levels that would normally occur when the sensory neurites interact with the major proximal axons of L7. Treatment with 5-HT also modulated the efficacy of the developing synaptic connections. The change in synapse efficacy was accompanied by an increase in the formation of new sensory varicosities and branches with pioneering growth cones extending on the major axons of L7. The results are consistent with the hypothesis that treatment with 5-HT modulates local differences in the expression of cell adhesion molecules on the surface of the interacting cells making motor neurites more attractive for sensory growth cones, thereby affecting new sensory neuritic growth and synapse formation.