The role of polysialic acid (PSA) during initial innervation of chick muscle was examined. Previously, the adhesion molecules L1 and N-CAM were shown to be important in balancing axon-axon and axon-muscle adhesion during this process. Here we demonstrate developmental changes in the pattern of innervation that are not correlated with levels of L1 or N-CAM expression, but rather with the amount of PSA at the axon surface. Removal of PSA by a specific endoneuraminidase (Endo-N) increased axon fasciculation and reduced nerve branching. In contrast, the nerve trunk defasciculation and increased branching produced by neuromuscular activity blockade were associated with an increase in axonal PSA levels. Furthermore, Endo-N prevented these inactivity-induced effects on branching. Together these results illustrate the potential of PSA as a regulator of cell-cell interactions and provide a direct example of a molecular link between the morphogenic effects of adhesion-mediated and synaptic activity-dependent processes.