A growing number of proteins with extracellular leucine-rich repeats (eLRRs) have been implicated in directing neuronal connectivity. We previously identified a novel family of eLRR proteins in mammals: the Elfns are transmembrane proteins with 6 LRRs, a fibronectin type-3 domain and a long cytoplasmic tail. The recent discovery that Elfn1 protein, expressed postsynaptically, can direct the elaboration of specific electrochemical properties of synapses between particular cell types in the hippocampus strongly reinforces this hypothesis. Here, we present analyses of an Elfn1 mutant mouse line and demonstrate a functional requirement for this gene in vivo. We first carried out detailed expression analysis of Elfn1 using a β-galactosidase reporter gene in the knockout line. Elfn1 is expressed in distinct subsets of interneurons of the hippocampus and cortex, and also in discrete subsets of cells in the habenula, septum, globus pallidus, dorsal subiculum, amygdala and several other regions. Elfn1 is expressed in diverse cell types, including local GABAergic interneurons as well as long-range projecting GABAergic and glutamatergic neurons. Elfn1 protein localises to axons of excitatory neurons in the habenula, and long-range GABAergic neurons of the globus pallidus, suggesting the possibility of additional roles for Elfn1 in axons or presynaptically. While gross anatomical analyses did not reveal any obvious neuroanatomical abnormalities, behavioural analyses clearly illustrate functional effects of Elfn1 mutation. Elfn1 mutant mice exhibit seizures, subtle motor abnormalities, reduced thigmotaxis and hyperactivity. The hyperactivity is paradoxically reversible by treatment with the stimulant amphetamine, consistent with phenotypes observed in animals with habenular lesions. These analyses reveal a requirement for Elfn1 in brain function and are suggestive of possible relevance to the etiology and pathophysiology of epilepsy and attention-deficit hyperactivity disorder.