Neurofibromatosis type 1 (NF1) is a neurodevelopmental disorder associated with social and communicative disabilities. The cellular and circuit mechanisms by which loss of neurofibromin 1 (Nf1) results in social deficits are unknown. Here, we identify social behavioral dysregulation with Nf1 loss in Drosophila. These deficits map to primary dysfunction of a group of peripheral sensory neurons. Nf1 regulation of Ras signaling in adult ppk23+ chemosensory cells is required for normal social behaviors in flies. Loss of Nf1 attenuates ppk23+ neuronal activity in response to pheromones, and circuit-specific manipulation of Nf1 expression or neuronal activity in ppk23+ neurons rescues social deficits. This disrupted sensory processing gives rise to persistent changes in behavior beyond the social interaction, indicating a sustained effect of an acute sensory misperception. Together our data identify a specific circuit mechanism through which Nf1 regulates social behaviors and suggest social deficits in NF1 arise from propagation of sensory misinformation.