This study aims to demonstrate how PTP-3 regulates SYD-2 to control UNC-104-mediated axonal transport. UNC-104 is the C. elegans homolog of kinesin-3 KIF-1A known for its fast shuttling of STVs (synaptic vesicle protein transport vesicles) in axons. SYD-2 is the homolog of liprin-α in C. elegans known to directly regulate UNC-104 as well as being a substrate of LAR PTPR (leukocyte common antigen-related (LAR) protein tyrosine phosphatase (PTP) transmembrane receptor) with PTP-3 as the closest homolog in C. elegans. CoIP assays revealed increased interaction between UNC-104 and SYD-2 in lysates from ptp-3 knockout worms. Intramolecular FRET analysis revealed that SYD-2 predominantly exists in an open conformation state in ptp-3 mutants. These assays also revealed that non-phosphorylatable SYD-2 (Y741F) exists predominately in folded conformations while phosphomimicking SYD-2 (Y741E) exists predominantly in open conformations. In ptp-3 mutants, SNB-1 cargo accumulates in soma while at the same time UNC-104 motors increasingly cluster along initial segments of axons. Interestingly, the unc-104 gene is downregulated in ptp-3 mutants that might explain the vesicle retention phenotype. More strikingly, the few visibly moving motors and STVs were overly active in neurons of these mutants. We propose a model in which the lack of PTP-3 promotes increased open conformations of SYD-2 that in turn facilitates UNC-104/SYD-2 interactions boosting motor and STVs moving speeds.