The semaphorins comprise a large family of conserved glycoproteins, several members of which have been shown to function in repulsive neuronal growth cone guidance. We show here that Drosophila Semaphorin I (Sema I), a transmembrane semaphorin expressed on embryonic motor and CNS axons, is required for correct guidance of motor axons and for the formation of CNS pathways. In mutant embryos lacking Sema I, motor axons stall and fail to defasciculate at specific choice points where normally they would project to their muscle targets. In addition, a specific CNS fascicle fails to form correctly in these embryos. Rescue and ectopic expression experiments show that Sema I is required in neurons to mediate axon guidance decisions. These studies further suggest that like secreted semaphorins, transmembrane semaphorins can function as repulsive guidance cues for specific axon guidance events during neurodevelopment.