Motor axons receive retrograde signals from skeletal muscle that are essential for the differentiation and stabilization of motor nerve terminals. Identification of these retrograde signals has proved elusive, but their production by muscle depends on the receptor tyrosine kinase, MuSK (muscle, skeletal receptor tyrosine-protein kinase), and Lrp4 (low-density lipoprotein receptor (LDLR)-related protein 4), an LDLR family member that forms a complex with MuSK, binds neural agrin and stimulates MuSK kinase activity. Here we show that Lrp4 also functions as a direct muscle-derived retrograde signal for early steps in presynaptic differentiation. We demonstrate that Lrp4 is necessary, independent of MuSK activation, for presynaptic differentiation in vivo, and we show that Lrp4 binds to motor axons and induces clustering of synaptic-vesicle and active-zone proteins. Thus, Lrp4 acts bidirectionally and coordinates synapse formation by binding agrin, activating MuSK and stimulating postsynaptic differentiation, and functioning in turn as a muscle-derived retrograde signal that is necessary and sufficient for presynaptic differentiation.