Glial cell line-derived neurotrophic factor (GDNF) is known for its potent effect on neuronal survival, but its role in the development and function of synapses is not well studied. Using Xenopus nerve-muscle co-cultures, we show that GDNF and its family member neurturin (NRTN) facilitate the development of the neuromuscular junction (NMJ). Long-term application of GDNF significantly increased the total length of neurites in the motoneurons. GDNF also caused an increase in the number and the size of synaptic vesicle clustering, as demonstrated by synaptobrevin-GFP fluorescent imaging, and FM dye staining. Electrophysiological experiments revealed two effects of GDNF on synaptic transmission at NMJ. First, GDNF markedly increased the frequency of spontaneous transmission and decreased the variability of evoked transmission, suggesting an enhancement of transmitter secretion. Second, GDNF elicited a small increase in the quantal size, without affecting the average rise and decay times of synaptic currents. Imaging analysis showed that the size of acetylcholine receptor clusters at synapses increased in muscle cells overexpressing GDNF. Neurturin had very similar effects as GDNF. These results suggest that GDNF and NRTN are new neuromodulators that regulate the development of the neuromuscular synapse through both pre- and postsynaptic mechanisms.