Extension of axonal and dendritic processes in the CNS is tightly regulated by outgrowth-promoting and -inhibitory cues to assure precision of synaptic connections. We identify a novel role for contactin-associated protein (Caspr) as an inhibitory cue that reduces neurite outgrowth from CNS neurons. We show that proteolysis of Caspr at the cell surface is regulated by the cellular form of prion protein (PrP), which directly binds to Caspr. PrP inhibits Reelin-mediated shedding of Caspr from the cell surface, thereby increasing surface levels of Caspr and potentiating the inhibitory effect of Caspr on neurite outgrowth. PrP deficiency results in reduced levels of Caspr at the cell surface, enhanced neurite outgrowth in vitro, and more efficient regeneration of axons in vivo following spinal cord injury. Thus, we reveal a previously unrecognized role for Caspr and PrP in inhibitory modulation of neurite outgrowth in CNS neurons, which is counterbalanced by the proteolytic activity of Reelin.
