During development of the nervous system, growing axons rely on guidance molecules to direct axon pathfinding. A well-characterized family of guidance molecules are the membrane-associated ephrins, which together with their cognate Eph receptors, direct axon navigation in a contact-mediated fashion. In C. elegans, the ephrin-Eph signaling system is conserved and is best characterized for their roles in neuroblast migration during early embryogenesis. This study demonstrates a role for the C. elegans ephrin EFN-4 in axon guidance. We provide both genetic and biochemical evidence that is consistent with the C. elegans divergent L1 cell adhesion molecule LAD-2 acting as a non-canonical ephrin receptor to EFN-4 to promote axon guidance. We also show that EFN-4 probably functions as a diffusible factor because EFN-4 engineered to be soluble can promote LAD-2-mediated axon guidance. This study thus reveals a potential additional mechanism for ephrins in regulating axon guidance and expands the repertoire of receptors by which ephrins can signal.