Dendritic arborization is a critical neuronal differentiation process. Here, we demonstrate that syndecan-2 (Sdc2), a synaptic heparan sulfate proteoglycan that triggers dendritic filopodia and spine formation, regulates dendritic arborization in cultured hippocampal neurons. This process is controlled by sterile α and TIR motif-containing 1 protein (Sarm1), a negative regulator of Toll-like receptor 3 (TLR3) in innate immunity signaling. We show that Sarm1 interacts with and receives signal from Sdc2 and controls dendritic arborization through the MKK4-JNK pathway. In Sarm1 knockdown mice, dendritic arbors of neurons were less complex than those of wild-type littermates. In addition to acting downstream of Sdc2, Sarm1 is expressed earlier than Sdc2, which suggests that it has multiple roles in neuronal morphogenesis. Specifically, it is required for proper initiation and elongation of dendrites, axonal outgrowth, and neuronal polarization. These functions likely involve Sarm1-mediated regulation of microtubule stability, as Sarm1 influenced tubulin acetylation. This study thus reveals the molecular mechanism underlying the action of Sarm1 in neuronal morphogenesis.