Sensory neurons possess the central and peripheral branches and they form unique spinal neural circuits with motoneurons during development. Peripheral branches of sensory axons fasciculate with the motor axons that extend toward the peripheral muscles from the central nervous system (CNS), whereas the central branches of proprioceptive sensory neurons directly innervate motoneurons. Although anatomically well documented, the molecular mechanism underlying sensory-motor interaction during neural circuit formation is not fully understood. To investigate the role of motoneuron on sensory neuron development, we analyzed sensory neuron phenotypes in the dorsal root ganglia (DRG) of Olig2 knockout (KO) mouse embryos, which lack motoneurons. We found an increased number of apoptotic cells in the DRG of Olig2 KO embryos at embryonic day (E) 10.5. Furthermore, abnormal axonal projections of sensory neurons were observed in both the peripheral branches at E10.5 and central branches at E15.5. To understand the motoneuron-derived factor that regulates sensory neuron development, we focused on neurotrophin 3 (Ntf3; NT-3), because Ntf3 and its receptors (Trk) are strongly expressed in motoneurons and sensory neurons, respectively. The significance of motoneuron-derived Ntf3 was analyzed using Ntf3 conditional knockout (cKO) embryos, in which we observed increased apoptosis and abnormal projection of the central branch innervating motoneuron, the phenotypes being apparently comparable with that of Olig2 KO embryos. Taken together, we show that the motoneuron is a functional source of Ntf3 and motoneuron-derived Ntf3 is an essential pre-target neurotrophin for survival and axonal projection of sensory neurons.