Establishment of synaptic connections in the neuropils of the developing nervous system requires the coordination of specific neurite-neurite interactions (i.e., axon-axon, dendrite-dendrite and axon-dendrite interactions). The molecular mechanisms underlying coordination of neurite-neurite interactions for circuit assembly are incompletely understood. In this report, we identify a novel Ig superfamily transmembrane protein that we named Borderless (Bdl), as a novel regulator of neurite-neurite interactions in Drosophila. Bdl induces homotypic cell-cell adhesion in vitro and mediates neurite-neurite interactions in the developing visual system. Bdl interacts physically and genetically with the Ig transmembrane protein Turtle, a key regulator of axonal tiling. Our results also show that the receptor tyrosine phosphatase leukocyte common antigen-related protein (LAR) negatively regulates Bdl to control synaptic-layer selection. We propose that precise regulation of Bdl action coordinates neurite-neurite interactions for circuit formation in Drosophila.