To investigate the effects of neurotrophin-3 (NT-3) on postnatal proprioceptive neurons and their targets, transgenic mice were generated that use the myosin light chain 1 (mlc) promoter to overexpress NT-3 in skeletal muscle. Ribonuclease protection assays revealed that NT-3 overexpression in hindlimb skeletal muscle began at embryonic day 14 (E14) and continued throughout adulthood. Overexpression of NT-3 during late embryogenesis resulted in increased numbers of large sensory and small fusimotor axons. Within a week of birth, mlc/NT-3 mice retract their limbs to the torso when lifted by the tail. Footprint analysis revealed that mlc/NT-3 mice had significant abnormalities in their gait compared with wild-types. Beam walking and rotorod analysis confirmed the poor limb control by mlc/NT-3 mice. These locomotive deficits progressively worsened with age and were likely related to the formation of morphologically abnormal muscle spindles. The most common spindle anomaly was the presence of excessive intrafusal bag fibers within individual muscle spindles. To assess the role of NT-3 in recovery from nerve injury, sciatic nerve crushes were performed in young adult mice. Two days after injury, mlc/NT-3 mice displayed significantly improved sciatic functional indexes and a significant increase in muscle spindles that remained associated with axons. The latter finding suggests that excess NT-3 in muscle may retard the degeneration of proprioceptive axons after nerve crush. Long-term survival after nerve injury in mlc/NT-3 mice did not induce further changes in spindle number or morphology. These findings demonstrate that, in addition to promoting embryonic proprioceptive neuron survival, postnatal overexpression of NT-3 in muscle leads to abnormal spindle formation and deficits in locomotive control. However, our results also show that NT-3 may be therapeutic for proprioceptive axons immediately after nerve injury by delaying axon degeneration.