We describe a new member of the receptor protein tyrosine phosphatase family, R-PTP-kappa, cDNA cloning predicts that R-PTP-kappa is synthesized from a precursor protein of 1,457 amino acids. Its intracellular domain displays the classical tandemly repeated protein tyrosine phosphatase homology, separated from the transmembrane segment by an uncharacteristically large juxta-membrane region. The extracellular domain of the R-PTP-kappa precursor protein contains an immunoglobulin-like domain and four fibronectin type III-like repeats, preceded by a signal peptide and a region of about 150 amino acids with similarity to the Xenopus A5 antigen, a putative neuronal recognition molecule (S. Takagi, T. Hsrata, K. Agata, M. Mochii, G. Eguchi, and H. Fujisawa, Neuron 7:295-307, 1991). Antibodies directed against the intra- and extracellular domains reveal that the R-PTP-kappa precursor protein undergoes proteolytic processing, following which both cleavage products remain associated. By site-directed mutagenesis, the likely cleavage site was shown to be a consensus sequence for cleavage by the processing endopeptidase furin, located in the fourth fibronectin type III-like repeat. In situ hybridization analysis indicates that expression of R-PTP-kappa in the central nervous system is developmentally regulated, with highest expression seen in actively developing areas and, in the adult, in areas capable of developmental plasticity such as the hippocampal formation and cerebral cortex. The mouse R-PTP-kappa gene maps to chromosome 10, at approximately 21 centimorgans from the centromere.