Diffusible factors, including netrins and semaphorins, are believed to be important cues for the formation of neural circuits in the forebrain. Here we have examined the role of netrin 1 in the development of hippocampal connections. We show that netrin 1 and its receptor, Dcc, are expressed in the developing fimbria and in projection neurons, respectively, and that netrin 1 promotes the outgrowth of hippocampal axons in vitro via DCC receptors. We also show that the hippocampus of netrin 1-deficient mice shows a misorientation of fiber tracts and pathfinding errors, as detected with antibodies against the surface proteins TAG-1, L1 and DCC. DiI injections show that hippocampal commissural axons do not cross the midline in these mutants. Instead, when axons approach the midline, they turn ventrally and form a massive aberrant projection to the ipsilateral septum. In addition, both the ipsilateral entorhino-hippocampal and the CA3-to-CA1 associational projections show an altered pattern of layer-specific termination in netrin 1-deficient mice. Finally, optical recordings with the Ca(2+) indicator Fura 2-AM show that spontaneous neuronal activity is reduced in the septum of netrin 1-mutant mice. We conclude that netrin 1 is required not only for the formation of crossed connections in the forebrain, but also for the appropriate layer-specific targeting of ipsilateral projections and for the control of normal levels of spontaneous neural activity.