Latrophilin-1 (LPHN1) was isolated as the main high-affinity receptor for α-latrotoxin from black widow spider venom, a powerful presynaptic secretagogue. As an adhesion G-protein-coupled receptor, LPHN1 is cleaved into two fragments, which can behave independently on the cell surface, but re-associate upon binding the toxin. This triggers intracellular signaling that involves the Gαq/phospholipase C/inositol 1,4,5-trisphosphate cascade and an increase in cytosolic Ca
2+
, leading to vesicular exocytosis. Using affinity chromatography on LPHN1, we isolated its endogenous ligand, teneurin-2/Lasso. Both LPHN1 and Ten2/Lasso are expressed early in development and are enriched in neurons. LPHN1 primarily resides in axons, growth cones and presynaptic terminals, while Lasso largely localizes on dendrites. LPHN1 and Ten2/Lasso form a trans-synaptic receptor pair that has both structural and signaling functions. However, Lasso is proteolytically cleaved at multiple sites and its extracellular domain is partially released into the intercellular space, especially during neuronal development, suggesting that soluble Lasso has additional functions. We discovered that the soluble fragment of Lasso can diffuse away and bind to LPHN1 on axonal growth cones, triggering its redistribution on the cell surface and intracellular signaling which leads to local exocytosis. This causes axons to turn in the direction of spatio-temporal Lasso gradients, while LPHN1 knockout blocks this effect. These results suggest that the LPHN1-Ten2/Lasso pair can participate in long- and short-distance axonal guidance and synapse formation.