Nogo receptor type 1 (NgR1) is known to inhibit neuronal regeneration in the CNS. We have previously identified lateral olfactory tract usher substance (LOTUS) interacts with NgR1 and inhibits its function by blocking its ligand binding. Therefore, LOTUS is expected to have therapeutic potential for the promotion of neuronal regeneration. However, it remains unknown whether the soluble form of LOTUS (s-LOTUS) also has an inhibitory action on NgR1 function as a candidate for therapeutic agents. Here, we show that s-LOTUS inhibits NgR1-mediated signaling by inhibiting the molecular interaction between NgR1 and its co-receptor p75 neurotrophin receptor (p75). In contrast to the membrane-bound form of LOTUS, s-LOTUS did not block ligand binding to NgR1. However, we identified p75 as a novel LOTUS binding partner, and found that s-LOTUS suppressed the interaction between p75 and NgR1. s-LOTUS inhibited myelin-associated inhibitor (MAI)-induced RhoA activation in murine cortical neurons. Functional analyses revealed that s-LOTUS inhibited MAI-induced growth cone collapse and neurite outgrowth inhibition in chick DRG neurons. In addition, while olfactory bulb (OB) neurons of -KO mice are sensitive to MAI due to a lack of LOTUS expression, treatment with s-LOTUS inhibited MAI-induced growth cone collapse in these neurons. Finally, we observed that s-LOTUS promoted axonal regeneration in optic nerve crush injury of mice (either sex). These findings suggest that s-LOTUS inhibits NgR1-mediated signaling possibly by interfering with the interaction between NgR1 and p75 Thus, s-LOTUS may have potential as a therapeutic agent for neuronal regeneration in the damaged CNS.Nogo receptor type 1 (NgR1) is a well-known receptor to inhibit neuronal regeneration in the CNS. Because the membrane-bound form of LOTUS antagonizes NgR1 through a cis-type molecular interaction between LOTUS and NgR1, the soluble form of LOTUS (s-LOTUS) is expected to be a therapeutic agent for neuronal regeneration. In our present study, we show that s-LOTUS inhibits the interaction between NgR1 and p75, NgR1 ligand-induced RhoA activation, growth cone collapse and neurite outgrowth inhibition, and promotes axonal regeneration. Our results indicate that s-LOTUS inhibits NgR1-mediated signaling through a trans-type molecular interaction between LOTUS and NgR1, and therefore, s-LOTUS may have therapeutic potential for neuronal regeneration.