The Drosophila slit locus encodes a protein with four regions containing tandem arrays of a 24-amino-acid leucine-rich repeat (LRR) with conserved flanking sequences (flank-LRR-flank surrounding these arrays), followed by two regions with epidermal growth factor (EGF)-like repeats. Each of these motifs has been implicated in protein-protein interactions as part of an extracellular domain in a variety of other proteins. Analysis of slit cDNA clones reveals that as a consequence of alternative splicing, the locus can code for two distinct protein species differing by 11 amino acids at the carboxyl terminus of the last EGF repeat. The existence of a putative signal sequence and the absence of a transmembrane domain suggest that slit is secreted, an observation supported by an analysis of its expression in tissue culture. Examining the expression pattern of slit in the embryo by antibody staining, enhancer trap detection, and in situ hybridization, we demonstrate that the protein is expressed by a subset of glial cells along the midline of the developing central nervous system. Through immunoelectron microscopy, slit can be seen on the commissural axons traversing the glial cells although it is absent from the cell bodies of these neurons, implying that slit is exported by the glia and distributed along the axons. Finally, we demonstrate that a reduction in slit expression results in a disruption of the developing midline cells and the commissural axon pathways. The embryonic localization, mutant phenotype, and homology of slit to both receptor-binding EGF-like ligands and adhesive glycoproteins suggest that it may be involved in interactions between the midline glial cells, their extracellular environment, and the commissural axons that cross the midline.