Contact repulsion of growing axons is an essential mechanism for spinal nerve patterning. In birds and mammals the embryonic somites generate a linear series of impenetrable barriers, forcing axon growth cones to traverse one half of each somite as they extend towards their body targets. This study shows that protein disulphide isomerase provides a key component of these barriers, mediating contact repulsion at the cell surface in chick half-somites. Repulsion is reduced both in vivo and in vitro by a range of methods that inhibit enzyme activity. The activity is critical in initiating a nitric oxide/S-nitrosylation-dependent signal transduction pathway that regulates the growth cone cytoskeleton. Rat forebrain grey matter extracts contain a similar activity, and the enzyme is expressed at the surface of cultured human astrocytic cells and rat cortical astrocytes. We suggest this system is co-opted in the brain to counteract and regulate aberrant nerve terminal growth.