The prehensile arms of the cephalopod are among these animals' most remarkable features, but little is known about the neural circuitry governing arm and sucker movements1,2. Here, we investigated the cellular and molecular organization of the arm nervous system, focusing on the massive axial nerve cords (ANCs) in the octopus arms which collectively harbor four times as many neurons as the central brain3. We found that the ANC is segmented. In transverse cross sections, the ANC cell body layer wraps around the neuropil with no apparent segregation of sensory and motor neurons. In longitudinal sections, however, ANC neurons form segments, setting up a modular organization to the adjoining ANC neuropil. The septa between each segment are, in contrast, neuron-poor but contain nerve exits, vasculature and abundant collagen. Surprisingly, nerves exiting from neighboring septa differ in their fiber trajectories indicating that multiple adjoining segments must cooperate to innervate the arm musculature fully. The nerves for each sucker also exit through septa and set up a spatial “suckerotopy” in the ANC. A strong link between ANC segmentation and flexible sucker-laden arms was confirmed by comparative study of squid arms and tentacles. The ANC segmental modules represent a new template for understanding the motor control of octopus soft tissues. They also provide the first example of nervous system segmentation in a mollusc4.