Background: GABAergic interneurons regulate the balance and dynamics of neural circuits, in part, by elaborating their strategically placed axon branches that innervate specific cellular and subcellular targets. However, the molecular mechanisms that regulate target-directed GABAergic axon branching are not well understood. Results: Here we show that the secreted axon guidance molecule, SEMA3A, expressed locally by Purkinje cells, regulates cerebellar basket cell axon branching through its cognate receptor Neuropilin-1 (NRP1). SEMA3A was specifically localized and enriched in the Purkinje cell layer (PCL). In sema3A(-/-) and nrp1(sema-/sema-) mice lacking SEMA3A-binding domains, basket axon branching in PCL was reduced. We demonstrate that SEMA3A-induced axon branching was dependent on local recruitment of soluble guanylyl cyclase (sGC) to the plasma membrane of basket cells, and sGC subcellular trafficking was regulated by the Src kinase FYN. In 6m-deficient mice, basket axon terminal branching was reduced in PCL, but not in the molecular layer. Conclusions: These results demonstrate a critical role of local SEMA3A signaling in layer-specific axonal branching, which contributes to target innervation.