We have previously described the cloning of phosphacan, a chondroitin sulfate proteoglycan of nervous tissue which interacts with neurons, glia, neural cell adhesion molecules, and tenascin, and represents the extracellular domain of a receptor-type protein tyrosine phosphatase. We now report the complete cDNA and deduced amino acid sequences of the rat transmembrane phosphatase, and demonstrate that the phosphatase and the extracellular proteoglycan have different 3'-untranslated regions. Northern analysis showed three probable splice variants, comprising the extracellular proteoglycan (phosphacan) and long and short forms of the transmembrane phosphatase. PCR studies of rat genomic DNA indicated that there are no introns at the putative 5' and 3' splice sites or in the 2.6 kb segment which is deleted in the short transmembrane protein. Using variant-specific riboprobes corresponding to sequences in the 3'-untranslated region of phosphacan and in the first or second phosphatase domains of the transmembrane protein, in situ hybridization histochemistry of embryonic rat brain and spinal cord and early postnatal cerebellum demonstrated identical localizations of phosphacan and phosphatase mRNAs.