The cell adhesion molecule L1 mediates neurite outgrowth and fasciculation during embryogenesis and mutations in its gene have been linked to a number of human congenital syndromes. To identify DNA sequences that restrict expression of L1 to the nervous system, we isolated a previously unidentified segment of the mouse L1 gene containing the promoter, the first exon, and the first intron and examined its activity in vitro and in vivo. We found that a neural restrictive silencer element (NRSE) within the second intron prevented expression of L1 gene constructs in nonneural cells. For optimal silencing of L1 gene expression by the NRSE-binding factor RE-1-silencing transcription factor (REST)/NRSF, both the NRSE and sequences in the first intron were required. In transgenic mice, an L1lacZ gene construct with the NRSE generated a neurally restricted expression pattern consistent with the known pattern of L1 expression in postmitotic neurons and peripheral glia. In contrast, a similar construct lacking the NRSE produced precocious expression in the peripheral nervous system and ectopic expression in mesenchymal derivatives of the neural crest and in mesodermal and ectodermal cells. These experiments show that the NRSE and REST/NRSF are important components in restricting L1 expression to the embryonic nervous system.