During embryogenesis, Schwann cells interact with axons and other Schwann cells, as they migrate, ensheath axons, and participate in organizing peripheral nervous tissues. The experiments reported here indicate that the calcium-dependent molecule, N-cadherin, mediates adhesion of Schwann cells to neurites and to other Schwann cells. Cell cultures from chick dorsal root ganglia and sciatic nerves were maintained in media containing either 2 mM Ca++ or 0.2 mM Ca++, a concentration that inactivates calcium-dependent cadherins. When the leading lamellae of Schwann cells encountered migrating growth cones in medium with 2 mM Ca++, they usually remained extended, and the growth cones often advanced onto the Schwann cell upper surface. In the low Ca++ medium, the frequency of withdrawal of the Schwann cell lamella after contact with a growth cone was much greater, and withdrawal was the most common reaction to growth cone contact in medium with 2 mM Ca++ and anti-N-cadherin. Similarly, when motile leading margins of two Schwann cells touched in normal Ca++ medium, they often formed stable areas of contact. N-cadherin and vinculin were co-concentrated at these contact sites between Schwann cells. However, in low Ca++ medium or in the presence of anti-N-cadherin, interacting Schwann cells usually pulled away from each other in a behavior reminiscent of contact inhibition between fibroblasts. In cultures of dissociated cells in normal media, Schwann cells frequently were aligned along neurites, and ultrastructural examination showed extensive close apposition between plasma membranes of neurites and Schwann cells. When dorsal root ganglia explants were cultured with normal Ca++, Schwann cells migrated away from the explants in close association with extending neurites. All these interactions were disrupted in media with 0.2 mM Ca++. Alignment of Schwann cells along neurites was infrequent, as were extended close apposition between axonal and Schwann cell plasma membranes. Finally, migration of Schwann cells from ganglionic explants was reduced by disruption of adhesive contact with neurites. The addition of antibodies against N-cadherin to medium with normal Ca++ levels had similar effects as lowering the Ca++ concentration, but antibodies against the neuronal adhesive molecule, L1, had no effects on interactions between Schwann cells and neurites.