Glial cells express three splicing variants of a receptor-type protein tyrosine phosphatase called RPTP beta. Two are receptor forms that differ in a large extracellular domain. The third is a secreted proteoglycan called phosphacan that lacks the cytoplasmic phosphatase domains. We have now identified, by immunoblotting, proteins corresponding to these three forms of RPTP beta in rat C6 glioma cells and brain. The short receptor form is much more prevalent than the full-length receptor in C6 glioma cells. Phosphacan is much more abundant than either of the receptor forms in rat brain, and its expression increases progressively during embryonic development, while the receptor forms show only moderate changes. In contrast to the long form and phosphacan that were detected as proteoglycans, the short receptor form, lacking the large alternatively spliced domain, was not detected as a chondroitin sulfate proteoglycan. We recently showed that phosphacan binds to the neuron-glia cell adhesion molecule, Ng-CAM, and we now report that glia expressing RPTP beta adhere and extend processes on substrates coated with Ng-CAM. After one day in culture, however, the glia retract their processes and often lift off the substrate. Conditioned medium from glial cells, which contains large amounts of phosphacan, inhibits glial adhesion to Ng-CAM, and depletion of phosphacan from the conditioned medium by immunoadsorption reduces the inhibitory activity. The results show that phosphacan increases dramatically during development, and indicate that secreted forms of RPTP beta can modulate glial cell adhesion and behavior.