The ability of differentiating sensory neurons to remodel a fibronectin substratum was examined. During the early stages of neurite outgrowth, fibronectin was cleared from areas beneath the neuronal soma and processes. The removal of fibronectin occurred in the presence and absence of plasminogen and was associated with the release of fibronectin fragments into the culture medium. The degradation of fibronectin was dependent upon neuronal contact with the substratum. Extraction of cells with the nonionic detergent Triton X-114 identified plasminogen activator and plasmin associated with the cell surface. These findings suggest that the plasminogen activator/plasmin system may play an important role in the interaction of differentiating sensory neurons with the extracellular matrix during axonal outgrowth.