Previous experiments identified AL‐1 as a glycosylphosphatidylinositol (GPI)‐linked ligand for the Eph‐related receptor, REK7, and showed that a REK7‐IgG fusion protein blocks axon bundling in co‐cultures of cortical neurons on astrocytes, suggesting a role for REK7 and AL‐1 in axon fasciculation. Subsequent identification of RAGS, the chick homologue of AL‐1, as a repellent axon guidance molecule in the developing chick visual system led to speculation that AL‐1, expressed on astrocytes, provides a repellent stimulus for cortical axons, inducing them to bundle as an avoidance mechanism. Using a growth cone collapse assay to test this hypothesis, we show that a soluble AL‐1‐IgG fusion protein is a potent collapsing factor for embryonic rat cortical neurons. The response is strongly correlated with REK7 expression, implicating REK7 as a receptor mediating AL‐1‐induced collapse. Morphological collapse is preceded by an AL‐1‐IgG‐induced reorganization of the actin cytoskeleton that resembles the effects of cytochalasin D. This suggests a pathway whereby REK7 activation by AL‐1 leads to perturbation of the actin cytoskeleton, possibly by an effect on actin polymerization, followed by growth cone collapse. We further show that AL‐1‐IgG causes collapse of rat hippocampal neurons and rat retinal ganglion cells. These data suggest a role for REK7 and AL‐1 in the patterning of axonal connections in the developing cortex, hippocampus and visual system.