Reciprocal signals between the motor axon and myofiber induce structural and functional differentiation in the developing neuromuscular junction (NMJ). Elevation of presynaptic acetylcholine (ACh) release on nerve-muscle contact and the correlated increase in axonal-free calcium are triggered by unidentified membrane molecules. Restriction of axon growth to the developing NMJ and formation of active zones for ACh release in the presynaptic terminal may be induced by molecules in the synaptic basal lamina, such as S-laminin, heparin binding growth factors, and agrin. Acetylcholine receptor (AChR) synthesis by muscle cells may be increased by calcitonin gene-related peptide (CGRP), ascorbic acid, and AChR-inducing activity (ARIA)/heregulin, which is the best-established regulator. Heparin binding growth factors, proteases, adhesion molecules, and agrin all may be involved in the induction of AChR redistribution to form postsynaptic-like aggregates. However, the strongest case has been made for agrin's involvement. "Knockout" experiments have implicated agrin as a primary anterograde signal for postsynaptic differentiation and muscle-specific kinase (MuSK), as a putative agrin receptor. It is likely that both presynaptic and postsynaptic differentiation are induced by multiple molecular signals. Future research should reveal the physiological roles of different molecules, their interactions, and the identity of other molecular participants.