Perineural invasion of cancer cells (CPNI) is found in most patients with pancreatic adenocarcinomas (PDA), prostate, or head and neck cancers. These patients undergo palliative rather than curative treatment due to dissemination of cancer along nerves, well beyond the extent of any local invasion. Although CPNI is a common source of distant tumor spread and a cause of significant morbidity, its exact mechanism is undefined. Immunohistochemical analysis of specimens excised from patients with PDAs showed a significant increase in the number of endoneurial macrophages (EMΦ) that lie around nerves invaded by cancer compared with normal nerves. Video microscopy and time-lapse analysis revealed that EMΦs are recruited by the tumor cells in response to colony-stimulated factor-1 secreted by invading cancer cells. Conditioned medium (CM) of tumor-activated EMΦs (tEMΦ) induced a 5-fold increase in migration of PDA cells compared with controls. Compared with resting EMΦs, tEMΦs secreted higher levels of glial-derived neurotrophic factor (GDNF), inducing phosphorylation of RET and downstream activation of extracellular signal–regulated kinases (ERK) in PDA cells. Genetic and pharmacologic inhibition of the GDNF receptors GFRA1 and RET abrogated the migratory effect of EMΦ-CM and reduced ERK phosphorylation. In an in vivo CPNI model, CCR2-deficient mice that have reduced macrophage recruitment and activation showed minimal nerve invasion, whereas wild-type mice developed complete sciatic nerve paralysis due to massive CPNI. Taken together, our results identify a paracrine response between EMΦs and PDA cells that orchestrates the formation of cancer nerve invasion. Cancer Res; 72(22); 5733–43. ©2012 AACR.