During leech embryogenesis, interactions between homologous neurons in neighboring segments lead to the selective retraction of longitudinal axonal projections by midbody AP and AE neurons, which maintain lateral axonal projections to the periphery. Results of experiments reported here show that disconnecting the lateral projections from the periphery rescues the projections normally fated to retract. We propose that these neurons normally progress through two states during early development, one in which they are insensitive to interactions with their homologs (state A) and a second in which they are sensitive (state B). Establishment of lateral connections with their targets triggers the switch from state A to state B; cutting these projections puts neurons back to state A.