Many neurons in both vertebrates and invertebrates innervate multiple targets by sprouting secondary axon collaterals (or branches) from a primary axon shaft. To begin to identify molecular regulators of axon branch initiation or extension, we studied the growth of single sensory axons in an in vitro collagen assay system and identified an activity in extracts of embryonic spinal cord and of postnatal and adult brain that promotes the elongation and formation of extensive branches by these axons. Biochemical purification of the activity from calf brain extracts led to the identification of an amino-terminal fragment of Slit2 as the main active component and to the discovery of a distinct activity that potentiates its effects. These results indicate that Slit proteins may function as positive regulators of axon collateral formation during the establishment or remodeling of neural circuits.