Heparin-Binding Growth-Associated Molecule (HB-GAM)/pleiotrophin is an 18 kDa extracellular matrix- and cell-surface-associated protein shown to enhance neurite outgrowth of perinatal forebrain neurones in vitro. The heparan sulphate proteoglycan N-syndecan has been isolated as a receptor/coreceptor for the HB-GAM. We have investigated, whether HB-GAM and N-syndecan could have a similar role in neurite outgrowth and axon guidance in early axonal tracts of brain. In the present study N-syndecan was found to be spatiotemporally associated with the developing axonal tracts already on embryonic day 9 in rat, as revealed by coexpression with class III β-tubulin, which is one of the earliest neuronal markers. Later, N-syndecan and HB-GAM were detected in the first afferent serotonergic projections arising from the pontine raphe nuclei. The expression pattern of HB-GAM peaked in the developing rhombencephalon at embryonic stage (E) 13-14. At the same time, N-syndecan was expressed in the developing raphe neurones growing neurites towards the diencephalon along HB-GAM immunoreactive pathways. When rhombencephalic neurones were cultured on decreasing concentrations of substrate-bound HB-GAM, E13 neurones showed a significantly better neurite outgrowth response than E11, E16 or E18 neurones. The neurite outgrowth of raphe neurones in vitro was inhibited by adding soluble heparin or N-syndecan into the culture medium, whereas addition of chondroitin sulphate had no effect. In a simple pathway assay, E13 raphe neurones selectively preferred attaching and growing neurites on pathways containing HB-GAM as compared with regions containing either laminin or fibronectin alone. Our results suggest that HB-GAM may function as a developmentally regulated cue for rhombencephalic neurones that possess N-syndecan on their cell membrane.