A splicing mutation in the IKBKAP gene encoding the IKAP/hELP1 (IKAP) protein was found to be the major cause of Familial Dysautonomia (FD). This mutation affects both the normal development and survival of sensory and sympathetic neurons of the peripheral nervous system (PNS). To understand the FD phenotype it is important to study the specific role played by IKAP in developing and mature PNS neurons. We used the neuroblastoma SHSY5Y cell line, originated from neural crest adrenal tumor, and simulated the FD phenotype by reducing IKAP expression with retroviral constructs. We observed that IKAP – down - regulated cells formed cell clusters compared to control cells under regular culture conditions. We examined the ability of these cells to differentiate into mature neurons in the presence of laminin, an essential extracellular matrix for developing PNS neurons. We found that the cells showed reduced attachment to laminin, morphological changes and increased cell-to-cell adhesion resulting in cell aggregates. We identified Contactin as the adhesion molecule responsible for this phenotype. We show that Contactin expression is related to IKAP expression, suggesting that IKAP regulates Contactin levels for appropriate cell-cell adhesion that could modulate neuronal growth of PNS neurons during development.