We have previously identified a molecule (named cell adhesion molecule [CAM]) that is involved in the in vitro aggregation of neural cells from chick embryos. In the present report, specific anti-CAM antibodies have been used to demonstrated that CAM is localized in neural tissues, and is associated with the plasma membrane of retinal cells and neurites. Furthermore, it has been shown by antibody absorption techniques that the decreased adhesiveness of cultured retinal cells obtained originally from older embryos is correlated with a decrease in the density or accessibility of cell adhesion molecules on the surface of these cells. The central role of CAM in neural cell aggregation has been established by the observation that anti-CAM Fab' fragments inhibit adhesion between neural cells in a variety of assays. To investigate the function of CAM and cell adhesion in developing tissues, aggregates of retinal cells that are capable of forming histotypic patterns in vitro were cultured in the presence and absence of anti-CAM Fab'. The Fab' was found to inhibit sorting out of cell bodies and neurites and to decrease the number of membrane-membrane contacts, suggesting that CAM is associated with cell-cell, cell-neurite, and neurite-neurite interactions.