The cell adhesion molecule (CAM) is involved in adhesion among embryonic retinal and brain cells and has been detected in a variety of neural tissues. This paper describes the use of spinal ganglion cultures and specific anti-CAM antibodies to determine the distribution of CAM on plasma membranes of nerve processes, and to assess the results of perturbation of its function during the growth of neurites from ganglia. The results indicate that CAM is distributed over the entire surface of nerve processes, and that specific anti-CAM Fab' fragments alter the morphology of neurite outgrowth. In particular, it was observed that anti-CAM inhibits formation of nerve bundles, so that the ganglion becomes surrounded by a tangled net of fine processes. Growth cone functions, such as neurite elongation, motility, and attachment to the substratum, did not appear to be affected by the antibody. These studies suggest that one of the major functions of CAM is to mediate side-to-side adhesion between neurites to form fascicles, and raise the possibility that this molecule serves a key role in embryogenesis of nerve tissues.