Retinal ganglion cell (RGC) axons grow towards the diencephalic ventral midline during embryogenesis guided by cues whose nature is largely unknown. We provide in vitro and in vivo evidence for a novel role of Sonic hedgehog (SHH) as a negative regulator of growth cone movement. SHH suppresses both the number and the length of neurites emerging from the chick retina but not from neural tube or dorsal root ganglia explants, without interfering with their rate of proliferation and differentiation. Similarly, retroviral-mediated ectopic expression of Shh along the chick visual pathway greatly interferes the growth of RGC axons. Upon SHH addition to grown neurites, the intracellular level of cAMP decreases, suggesting that the dampening of growth cone extension mediated by SHH may involve interaction with its receptor Patched which is expressed by RGC. Based on these findings, we propose that Shh expression at the chiasm border defines a constrained pathway within the ventral midline which serves to guide the progression of RGC axons.