Dopaminergic neurons in the substantia nigra and ventral tegmental area project to the caudate putamen and nucleus accumbens/olfactory tubercle, respectively, constituting mesostriatal and mesolimbic pathways. The molecular signals that confer target specificity of different dopaminergic neurons are not known. We now report that EphB1 and ephrin-B2, a receptor and ligand of the Eph family, are candidate guidance molecules for the development of these distinct pathways. EphB1 and ephrin-B2 are expressed in complementary patterns in the midbrain dopaminergic neurons and their targets, and the ligand specifically inhibits the growth of neurites and induces the cell loss of substantia nigra, but not ventral tegmental, dopaminergic neurons. These studies suggest that the ligand-receptor pair may contribute to the establishment of distinct neural pathways by selectively inhibiting the neurite outgrowth and cell survival of mistargeted neurons. In addition, we show that ephrin-B2 expression is upregulated by cocaine and amphetamine in adult mice, suggesting that ephrin-B2/EphB1 interaction may play a role in drug-induced plasticity in adults as well.