Boundary caps (BCs) form when neural crest cells, migrating ventrally alongside the neural tube, arrest at sites where axons will enter and exit. However, nothing is known of their subsequent fate and functions. We have found late-surviving neural crest BC cell clusters at proximal dorsal root entry sites throughout rat spinal cord development. Sensory afferents cross BCs to enter the spinal cord, while exiting astrocyte processes, destined to form the dorsal root entry zone (DREZ) after birth, are temporarily stalled in their vicinity. To test whether contact with BC cells influences neurite outgrowth from dorsal root ganglia, neurons were cultured on embryonic dorsal root/spinal cord cryosections. Neurites that entered CNS territory preferentially extended over BC cells. Thus, BC cells could be instrumental in regulating afferent ingrowth and DREZ morphogenesis in mammalian spinal cord development.