Axonal regrowth in the lesioned central nervous system (CNS) of adult mammals is, in part, prevented by non-permissive properties of glial cells and myelin. To test if ectopic expression of the neurite outgrowth promoting recognition molecule L1 will overcome these non-permissive influences and promote neurite outgrowth, L1 was expressed in astrocytes of transgenic mice using regulatory sequences of the glial fibrillary acidic protein (GFAP) gene. Northern blot analysis of different transgenic lines revealed different levels of transgenically expressed L1. Cultured astrocytes derived from transgenic animals displayed L1 immunoreactivity at the cell surface and in situ hybridization and immunocytochemical analysis of optic nerves from adult transgenic mice localized L1 expression to astrocytes. Expression of L1 protein by transgenic astrocytes was significantly upregulated in lesioned optic nerves. When mouse small cerebellar neurons or chick dorsal root ganglion neurons were cultured on cryosections of lesioned optic nerves or astrocyte monolayers from transgenic mice, respectively, neurite outgrowth was increased up to 400% on tissue sections and 50% on astrocytes compared with similar preparations from non-transgenic mice. The increase in neurite outgrowth on tissue sections or astrocyte monolayers from different transgenic lines was proportional to the different levels of L1 expression. Moreover, increased neurite outgrowth on these substrates was specifically inhibited by polyclonal L1 antibodies. In vivo, rescue of severed axons was enhanced in transgenic versus wild type animals, while regrowth of axons was slightly, but not significantly, increased. Together, our observations demonstrate that L1 promotes neurite outgrowth when expressed ectopically by astrocytes and that L1 is able to overcome, at least partially, the non-permissive substrate properties of differentiated CNS glial cells in vitro.