The mechanisms for directing and organising sensory axons within developing skin remain largely unknown. The present study provides the first evidence that signalling occurs between A-ephrins and Eph-A receptors during the development of rat cutaneous sensory innervation both during normal development and following skin injury. Specifically, our data indicate that ephrin-A4 mRNA and protein are expressed in the epidermis during late embryogenesis and the early postnatal period (E16-P3), and expression is significantly down-regulated postnatally. In addition, Eph-A receptors are expressed on dorsal root ganglia (DRG) cells at birth. The pattern of ephrin-A4 expression is mirrored by epidermal innervation, so that sensory terminals are restricted to epidermal regions devoid of ephrin-A4 but increase as ephrin-A4 expression subsides postnatally. Neonatal skin wounding causes sensory hyperinnervation and a differential screen of wounded vs. nonwounded skin revealed down-regulation of epidermal ephrin-A4 following neonatal skin wounding. Expression studies showed that this down-regulation is below the wound and coincides exactly with the onset of hyperinnervation. In vitro experiments show a function for ephrin-A4-Fc in inhibiting rat DRG neuronal growth and guidance when presented as either substratum-bound stripes of ephrin-A4-Fc or as soluble clustered proteins. In conclusion, these observations suggest that the Eph family ligand ephrin-A4 has an inhibitory influence on neonatal cutaneous nerve terminals from DRG sensory neurons in the hindlimb, and may serve to prevent inappropriate innervation of cutaneous regions. In addition, the absence of ephrin-A4 following neonatal skin wounding may play a critical permissive role in the sprouting response.