Neuronal wiring during development requires that the growth cones of axons and dendrites are correctly guided to their appropriate targets. As in other animals, axon growth cones in Caenorhabditis elegans integrate information in their extracellular environment via interactions among transiently expressed cell surface receptors, their ligands, and the extracellular matrix (ECM). Components of the ECM undergo a wide variety of post-translational modifications that may affect efficacy of binding to neuronal guidance molecules. The most common modification of the ECM is prolyl 4-hydroxylation. However, little is known of its importance in the control of axon guidance. In a screen of prolyl 4-hydroxylase (P4H) mutants, we found that genetic removal of a specific P4H subunit, DPY-18, causes dramatic defects in C. elegans neuroanatomy. In dpy-18 mutant animals, the axons of specific ventral nerve cord neurons do not respect the ventral midline boundary and cross over to the contralateral axon fascicle. We found that these defects are independent of the known role of dpy-18 in regulating body size and that dpy-18 acts from multiple tissues to regulate axon guidance. Finally, we found that the neuronal defects in dpy-18 mutant animals are dependent on the expression of muscle-derived basement membrane collagens and motor neuron-derived ephrin ligands. Loss of dpy-18 causes dysregulated ephrin expression and this is at least partially responsible for the neurodevelopmental defects observed. Together, our data suggest that DPY-18 regulates ephrin expression to direct axon guidance, a role for P4Hs that may be conserved in higher organisms.