Muscle cells depend on motoneurons for the initiation of postsynaptic differentiation during early development of the neuromuscular junction. Motoneurons secrete specific isoforms of the extracellular matrix protein agrin which trigger the aggregation of acetylcholine receptors (AChRs) on the muscle surface. Both motoneuron- and agrin-induced AChR aggregation are inhibited by heparin. Here we show that this inhibition is due to two separate and distinguishable mechanisms. At high concentrations, heparin directly binds to agrin isoforms which contain the peptide KSRK, resulting in a virtually complete inhibition of AChR clustering. Heparin and other polyanions do not bind to agrin splicing variants without KSRK insert. Isoforms containing or lacking the KSRK insert have a high potency to induce AChR aggregation in the presence of an activating eight-amino-acid insert. This activity is inhibited by low concentrations of heparin even in the absence of any binding of heparin to agrin. Therefore, this second type of inhibition is due to the interaction of heparin with a downstream component of the agrin-induced clustering pathway. Binding of heparin to this yet unidentified component substantially decreases, but does not completely abolish AChR aggregation. The inhibition is particularly strong on myotubes which have not completely matured in culture.