Kallmann syndrome is a neurological disorder characterized by various behavioral and neuroanatomical defects. The X-linked form of this disease is caused by mutations in the KAL-1 gene, which codes for a secreted molecule that is expressed in restricted regions of the brain. Its molecular mechanism of action has thus far remained largely elusive. We show here that expression of the Caenorhabditis elegans homolog of KAL-1 in selected sensory and interneuron classes causes a highly penetrant, dosage-dependent, and cell autonomous axon-branching phenotype. In a different cellular context, heterologous C. elegans kal-1 expression causes a highly penetrant axon-misrouting phenotype. The axon-branching and -misrouting activities require different domains of the KAL-1 protein. In a genetic modifier screen we isolated several loci that either suppress or enhance the kal-1-induced axonal defects, one of which codes for an enzyme that modifies specific residues in heparan sulfate proteoglycans, namely heparan-6O-sulfotransferase. We hypothesize that KAL-1 binds by means of a heparan sulfate proteoglycan to its cognate receptor or other extracellular cues to induce axonal branching and axon misrouting.