Mechanisms of cell-cell recognition and structural changes of growth cones (g.c.) and target membranes during contact formation are poorly understood. To examine these issues, we obtained a high magnification, real-time record of stable contact formation in cultured cells from the hippocampal CA1 area in the newborn rat. We used differential interference contrast (DIC) optics coupled to a video microscope for periods of over 24 h of continuous time-lapse recording. Our goal was to observe the sequential changes exhibited by afferent and target cells as they form a stable contact. Understanding the process of how stable contacts are made is important because such contacts are the first step in synapse formation. Four principal observations emerged from our study: (1) The target cell was receptive to a contact on a specific patch on its surface defined by the presence of lamellae and filopodia. This specific patch (named target site) was invariably present on the target cell surface before the time the growth cone arrived. (2) Stable adhesion between filopodia on the two cells initiated events leading to cell-cell contact formation. Specifically, the remaining filopodia on the growth cone and target cell were redirected toward the adhering filopodia, and the growth cone size decreased dramatically. (3) The axonal process then grew at a significantly accelerated rate (up to 50 times its baseline growth rate). (4) In addition, a number of observations were obtained on axonal turns towards the target cell, induction of target sites, and architectural remodelling of cells after the formation of a new contact. Our findings indicate that in this neuronal system, filopodia are the means used by cells to interact at stages prior to and during contact formation. We speculate that the molecules involved in cell recognition and the machinery that initiates contact formation are embedded in the fine structure of filopodia. Finally, our results provide possible clues as to some of the stages that may be involved in synapse formation in the mammalian central nervous system.