Process outgrowth and peripheral field innervation by an identified mechanosensory neuron were examined in the intact embryonic leech. The dorsal pressure-sensitive (PD) neurons of the leech CNS are found as bilateral pairs in every segmental ganglion, and are amenable to study at early ages in intact embryos. Each PD has one major axonal projection that putatively pioneers the nerve to the dorsal body wall and branches extensively in its own segment, and two minor projections that innervate, via neighboring ganglia, smaller areas in adjacent segments. We found that adjacent embryonic PD cells form overlapping terminal fields in the body wall, but that the extent of overlap was governed by inhibitory interactions among these fields. When one PD neuron was ablated, the adjacent PD cell changed its peripheral arborization by (1) its major axon producing more filopodia and extending longer side branches toward the ablated cell and (2) its minor axon producing a large arbor in the operated segment. Interestingly, although growth was biased toward the side of the ablated neuron, reduced outgrowth of the PD cell was found on the side away from the ablation, while the total extent of arborization of the PD cell kept relatively constant. Further, we found that axotomy of the major PD projection resulted in extensive outgrowth of its minor projections. These results suggest that a single PD neuron has a limited capacity for growth, each of its branches growing at the expense of the others, and that inhibitory interactions between neighboring PD neurons influence the extent and direction of that growth.