Two factors secreted from the nerve terminal, agrin and neuregulin, have been postulated to induce localization of the acetylcholine receptors (AChRs) to the subsynaptic membrane in skeletal muscle fibers. The principal function ascribed to neuregulin is induction of AChR subunit gene expression and to agrin is the aggregation of AChRs. Here we report that when myoblasts engineered to secrete an agrin fragment were placed into the nerve-free region of denervated rodent muscle, the host muscle fibers expressed AChR epsilon-subunit gene transcripts, characteristic of the neuromuscular synapse in adult muscle. Transcripts were colocalized with agrin deposits and AChR clusters that were resistant to electrical muscle activity. More directly, single innervated muscle fibers injected intracellularly with agrin expression plasmids in their extrasynaptic region developed a functional ectopic postsynaptic membrane with clusters of adult-type AChR channels and acetylcholinesterase and accumulation of myonuclei. The results demonstrate that agrin is the principal neural signal that induces the formation of the subsynaptic apparatus in the muscle fiber and controls locally, either indirectly or directly, the transcription of AChR subunit genes and the aggregation of AChRs.