Axon pathfinding relies on cellular signaling mediated by growth cone receptor proteins responding to ligands, or guidance cues, in the environment. Eph proteins are a family of receptor tyrosine kinases that govern axon pathway development, including retinal axon projections to CNS targets. Recent examination of EphB mutant mice, however, has shown that axon pathfinding within the retina to the optic disc is dependent on EphB receptors, but independent of their kinase activity. Here we show a function for EphB1, B2 and B3 receptor extracellular domains (ECDs) in inhibiting mouse retinal axons when presented either as substratum-bound proteins or as soluble proteins directly applied to growth cones via micropipettes. In substratum choice assays, retinal axons tended to avoid EphB-ECDs, while time-lapse microscopy showed that exposure to soluble EphB-ECD led to growth cone collapse or other inhibitory responses. These results demonstrate that, in addition to the conventional role of Eph proteins signaling as receptors, EphB receptor ECDs can also function in the opposite role as guidance cues to alter axon behavior. Furthermore, the data support a model in which dorsal retinal ganglion cell axons heading to the optic disc encounter a gradient of inhibitory EphB proteins which helps maintain tight axon fasciculation and prevents aberrant axon growth into ventral retina. In conclusion, development of neuronal connectivity may involve the combined activity of Eph proteins serving as guidance receptors and as axon guidance cues.