N-syndecan (syndecan-3) was previously isolated as a cell surface receptor for heparin-binding growth-associated molecule (HB-GAM) and suggested to mediate the neurite growth-promoting signal from cell matrix- bound HB-GAM to the cytoskeleton of neurites. However, it is unclear whether N-syndecan would possess independent signaling capacity in neurite growth or in related cell differentiation phenomena. In the present study, we have transfected N18 neuroblastoma cells with a rat N-syndecan cDNA and show that N-syndecan transfection clearly enhances HB-GAM-dependent neurite growth and that the transfected N-syndecan distributes to the growth cones and the filopodia of the neurites. The N-syndecan-dependent neurite outgrowth is inhibited by the tyrosine kinase inhibitors herbimycin A and PP1. Biochemical studies show that a kinase activity, together with its substrate(s), binds specifically to the cytosolic moiety of N-syndecan immobilized to an affinity column. Western blotting reveals both c-Src and Fyn in the active fractions. In addition, cortactin, tubulin, and a 30-kDa protein are identified in the kinase-active fractions that bind to the cytosolic moiety of N-syndecan. Ligation of N-syndecan in the transfected cells by HB-GAM increases phosphorylation of c-Src and cortactin. We suggest that N-syndecan binds a protein complex containing Src family tyrosine kinases and their substrates and that N-syndecan acts as a neurite outgrowth receptor via the Src kinase- cortactin pathway.