During organogenesis, secreted signaling proteins direct cell migration towards their target tissue. In Drosophila embryos, developing muscles are guided by signals produced by tendons to promote the proper attachment of muscles to tendons, essential for proper locomotion. Previously, the repulsive protein Slit, secreted by tendon cells, has been proposed to be an attractant for muscle migration. However, our findings demonstrate that through tight control of its distribution, Slit repulsion is used for both directing and arresting muscle migration. We show that Slit cleavage restricts its distribution to tendon cells, allowing it to function as a short-range repellent that directs muscle migration and patterning, and promotes their halt upon reaching the target site. Mechanistically, we show that Slit processing produces a rapidly degraded C-terminal fragment and an active, stable N-terminal polypeptide that is tethered to the tendon cell membrane, which further protects it from degradation. Consistently, the requirement for Slit processing can be bypassed by providing an uncleavable, membrane-bound form of Slit that is stable and is retained on expressing tendon cells. Moreover, muscle elongation appears to be extremely sensitive to Slit levels, as replacing the entire full-length Slit with the stable Slit-N-polypeptide results in excessive repulsion, which leads to a defective muscle pattern. These findings reveal a novel cleavage-dependent regulatory mechanism controlling Slit spatial distribution, which may operate in other Slit-dependent processes.