This study investigated the function of the adhesion molecule L1 in unmyelinated fibers of the peripheral nervous system (PNS) by analysis of L1- deficient mice. We demonstrate that L1 is present on axons and Schwann cells of sensory unmyelinated fibers, but only on Schwann cells of sympathetic unmyelinated fibers. In L1-deficient sensory nerves, Schwann cells formed but failed to retain normal axonal ensheathment. L1-deficient mice had reduced sensory function and loss of unmyelinated axons, while sympathetic unmyelinated axons appeared normal. In nerve transplant studies, loss of axonal-L1, but not Schwann cell-L1, reproduced the L1-deficient phenotype. These data establish that heterophilic axonal-L1 interactions mediate adhesion between unmyelinated sensory axons and Schwann cells, stabilize the polarization of Schwann cell surface membranes, and mediate a trophic effect that assures axonal survival.