Among the recognition molecules that determine a neuron's interaction with other cells, L1 and CD24 have been suggested to cooperate with each other in neurite outgrowth and signal transduction. Here we report that binding of CD24 to L1 depends on ␣2,3-sialic acid on CD24, which determines the CD24 induced and cell typespecific promotion or inhibition of neurite outgrowth. Using knockout mutants, we could show that the CD24-induced effects on neurite outgrowth are mediated via L1, and not GPI-linked CD24, by trans-interaction of L1 with sialylated CD24. This glycoform is excluded together with L1 from raft microdomains, suggesting that molecular compartmentation in the surface membrane could play a role in signal transduction.Path-finding of growth cones and neurite outgrowth toward targets are important events in the developing and regenerating nervous system and in synaptic remodeling during learning and memory. Axonal guidance depends on molecules at the cell surface and in the extracellular matrix. The different and often changing combinations of molecularly associated recognition molecules at the cell surface are important determinants of the ways by which the cell surface communicates with the cell interior, where cell surface signals are integrated to influence cell behavior.Two recognition molecules, L1 of the immunoglobulin superfamily and CD24, a highly glycosylated mucin type glycoprotein, interact with each other functionally (1, 2). L1 is a 200-kDa homophilic and heterophilic adhesion molecule expressed by many postmitotic neurons in the central nervous system (for reviews, see Refs. 3 and 4). It is one of the most potent promoters of neurite outgrowth in vitro known so far. Mutants of L1 in mice and men strongly underscore its importance during embryonic development in vivo (3,5,6).CD24 is linked to the surface membrane by a glycosyl phosphatidylinositol anchor and is, therefore, unable to directly interact with cytoplasmic proteins. It is also known as heatstable antigen or nectadrin with a peptide core of only 30 amino acids (for references, see Ref. 1). Similar to L1, it is highly expressed by neurons (7,8). The apparent molecular weight of CD24 varies considerably among cell types and also within each cell type, depending on its developmental stage due to differences in glycosylation pattern (for references, see Refs. 1 and 7). These observations suggest that post-translational modifications of CD24 play an important functional role. CD24 acts as a co-stimulator for various physiological functions. In the nervous system, CD24 has been reported to interact with L1 to stimulate cell adhesion and to increase intracellular Ca 2ϩ levels (1, 2). Interestingly, CD24 has been shown to inhibit neurite outgrowth of neonatal retinal ganglion cells and dorsal root ganglion neurons in culture (8) by yet unknown signal transduction mechanisms.Based on these observations on the functional interplay and molecular association between L1 and CD24, we decided to further study their functional interdependence. Her...