Protein-tyrosine phosphatase receptor type Z (PTPRZ) is predominantly expressed in the developing brain as a CS proteoglycan. PTPRZ has long (PTPRZ-A) and short type (PTPRZ-B) receptor forms by alternative splicing. The extracellular CS moiety of PTPRZ is required for high-affinity binding to inhibitory ligands, such as pleiotrophin (PTN), midkine, and interleukin-34; however, its functional significance in regulating PTPRZ activity remains obscure. We herein found that protein expression of CS-modified PTPRZ-A began earlier, peaking at approximately postnatal days 5-10 (P5-P10), and then that of PTN peaked at P10 at the developmental stage corresponding to myelination onset in the mouse brain. Ptn-deficient mice consistently showed a later onset of the expression of myelin basic protein, a major component of the myelin sheath, than wild-type mice. Upon ligand application, PTPRZ-A/B in cultured oligodendrocyte precursor cells exhibited punctate localization on the cell surface instead of diffuse distribution, causing the inactivation of PTPRZ and oligodendrocyte differentiation. The same effect was observed with the removal of CS chains with chondroitinase ABC but not polyclonal antibodies against the extracellular domain of PTPRZ. These results indicate that the negatively charged CS moiety prevents PTPRZ from spontaneously clustering and that the positively charged ligand PTN induces PTPRZ clustering, potentially by neutralizing electrostatic repulsion between CS chains. Taken altogether, these data indicate that PTN-PTPRZ-A signaling controls the timing of oligodendrocyte precursor cell differentiation in vivo, in which the CS moiety of PTPRZ receptors maintains them in a monomeric active state until its ligand binding.Myelination is an essential feature of the vertebrate nervous system that electrically insulates axons, thereby enabling the salutatory transmission of nerve impulses. Oligodendrocyte precursor cells (OPCs) 2 are the principal source of myelinating oligodendrocytes (1). Previous studies reported that protein tyrosine phosphorylation is crucially involved in the signal transduction mechanism for OPC differentiation into mature oligodendrocytes and myelin formation. FYN kinase in the Src tyrosine kinase family is the most prominent member involved in OPC differentiation and myelin formation (2). FYN activity is up-regulated during oligodendrocyte differentiation (3, 4), and Fyn-knock-out mice exhibit hypomyelination in the brain (5, 6). FYN phosphorylates p190 RhoGAP, a GTPase-activating protein (GAP) for Rho GTPase, to suppress Rho/ROCK, resulting in the maturation of oligodendrocytes and myelination (7,8).PTPRZ is the most abundant receptor-type protein-tyrosine phosphatase (RPTP) in OPCs (9, 10). PTPRZ dephosphorylates p190 RhoGAP, thereby acting as a counterpart of FYN (11,12). The amounts of myelin basic protein (MBP) and myelinated axons in the brain at postnatal day 10, when myelination occurs, are significantly higher in Ptprz-deficient mice than in wildtype animals, indicating a suppre...