This report describes the influence of neurite fasciculation on two aspects of nerve growth from chick spinal ganglia in vitro: the inhibition of outgrowth by high concentrations of nerve growth factor (NGF) and the preferential growth of neurites toward a capillary tube containing NGF. These studies involved a comparison of cultures of single cells, cell aggregates, and intact ganglia and the use of antibodies against the nerve cell adhesion molecule (CAM) to perturb fasciculation under a variety of conditions. The inhibition of outgrowth, which was observed with ganglia and aggregates but not with single cells, was correlated with a thickening of neurite fascicles. In accord with this observation, anti-CAM, which diminishes fasciculation by inhibiting side-to-side interactions between individual neurites, also partially reversed the inhibition of neurite outgrowth at high NGF concentrations. On the basis of these and other studies, we consider the possibility that neurite bundling causes an increase in the elastic tension of a fascicle without a compensatory increase in its adhesion to substratum. It is proposed that this imbalance could inhibit neurites from growing out from a ganglion and even result in retraction of preexisting outgrowth. In the analysis of NGF-directed growth, it was found that a capillary source of NGF produced a steep but transient NGF gradient that subsided before most neurites had emerged from the ganglion. Nevertheless, the presence of a single NGF capillary caused a dramatic and persistent asymmetry in the outgrowth of neurites from ganglia or cell aggregates. In contrast, processes of individual cells did not appear to orient themselves toward the capillary. The most revealing finding was that anti-CAM antibodies caused a decrease in the asymmetry of neurite outgrowth. These results suggest that side-to-side interactions among neurites can influence the guidance of nerve bundles by sustaining and amplifying an initial directional signal.