During metamorphosis in the hawkmoth Manduca sexta, larval leg motoneurons survive the degeneration of their target muscles to innervate new muscles that form during the development of the adult legs. Observation of muscle development in vivo suggest that there are close interactions between motor terminals and the muscle precursor cells at the earliest stages of muscle formation and surgical denervation compromises further development of adult muscles. Here we describe a nerve/muscle coculture system that allows further exploration of this critical developmental interaction. Muscle precursor cells derived from the developing thoracic legs of early pupae and cultured in the presence of neurons assumed a spindle-like morphology and fused to form multinucleate contractile myotubes. Contractile fibers did not form in cultures of muscle precursor cells alone. In the presence of neurons the rate of bromodeoxyuridine (BrdU) incorporation into myonuclei was significantly enhanced, suggesting that neurons promote the proliferation of myogenic cells. This effect was not unique to thoracic leg motoneurons of the early pupal stage, in that larval thoracic neurons as well as neurons from the pupal brain or abdominal ganglia were also effective at enhancing BrdU incorporation and the formation of contractile muscle fibers. Medium conditioned by neurons was ineffective at promoting BrdU incorporation, and in cocultures BrdU incorporation was enhanced only in regions of physical overlap between neurons and muscle precursor cells, suggesting that a very close-range interaction was involved. Tetrodotoxin-sensitive neuronal activity was not required for the effect on muscle development, but fixed neurons were ineffective. The insect steroid hormone 20-hydroxyecdysone enhanced BrdU incorporation into the nuclei of myogenic cells in both the presence and the absence of neurons. The results suggest that both neurons and ecdysteroids play an important regulatory role in adult muscle development, at least in part by enhancing the proliferation of myogenic cells.