The extracellular domain of receptor type protein tyrosine phosphatase beta (RPTP beta) exhibits striking sequence similarity with a soluble, rat brain chondroitin sulfate proteoglycan (3F8 PG). Immunoprecipitation experiments of cells transfected with RPTP beta expression vector and metabolically labeled with [35S]sulfate and [35S]methionine indicate that the transmembrane form of RPTP beta is indeed a chondroitin sulfate proteoglycan. The 3F8 PG is therefore a variant form composed of the entire extracellular domain of RPTP beta probably generated by alternative RNA splicing. Previous immunohistochemical studies indicated that both RPTP beta and the extracellular matrix protein tenascin are localized in similar regions of the central nervous system. We have performed co-aggregation assays with red and green Co-vaspheres coated with tenascin and 3F8 PG, respectively, showing that the extracellular domain of RPTP beta (3F8 PG) binds specifically to tenascin. The interaction between a receptor tyrosine phosphatase and an extracellular matrix protein may have a role in development of the mammalian central nervous system.