Developing neurons and Schwann cells have been shown to secrete proteases. The influence of these proteases on neurite outgrowth by cultured sensory ganglia was examined by adding specific protease inhibitors. Neonatal mouse dorsal root ganglia were cultured directly on tissue-culture plastic dishes in serum-free N2 medium with different protease inhibitors. Soybean trypsin inhibitor was found to double the extent of neurite outgrowth by 4 days in vitro. Ovomucoid trypsin inhibitor and leupeptin also increased neurite outgrowth, while alpha 1-antitrypsin, antipain and phenylmethylsulfonyl fluoride elicited a smaller effect. Furthermore, added trypsin or thrombin inhibited neurite outgrowth and the inhibition could be reversed by soybean trypsin inhibitor, while exogenous plasminogen or urokinase were inhibitory only at high concentrations. Thus neurite outgrowth probably requires a closely regulated system of protease secretion and protease inhibitor production.