Eph tyrosine kinase receptors and their membrane-bound ephrin ligands mediate cell interactions and participate in several developmental processes. Ligand binding to an Eph receptor results in tyrosine phosphorylation of the kinase domain, and repulsion of axonal growth cones and migrating cells. Here we report that a subpopulation of ephrin-A5 null mice display neural tube defects resembling anencephaly in man. This is caused by the failure of the neural folds to fuse in the dorsal midline, suggesting that ephrin-A5, in addition to its involvement in cell repulsion, can participate in cell adhesion. During neurulation, ephrin-A5 is co-expressed with its cognate receptor EphA7 in cells at the edges of the dorsal neural folds. Three different EphA7 splice variants, a full-length form and two truncated versions lacking kinase domains, are expressed in the neural folds. Co-expression of an endogenously expressed truncated form of EphA7 suppresses tyrosine phosphorylation of the full-length EphA7 receptor and shifts the cellular response from repulsion to adhesion in vitro. We conclude that alternative usage of different splice forms of a tyrosine kinase receptor can mediate cellular adhesion or repulsion during embryonic development.