We have previously shown that myelin-associated glycoprotein (MAG) inhibits neurite growth from a neuronal cell line. In this study we show that 60% of axonal growth cones of postnatal day 1 hippocampal neurons collapsed when they encountered polystyrene beads coated with recombinant MAG (rMAG). Such collapse was not observed with denatured rMAG. Neurite growth from rat embryonic hippocampal and neonatal cerebellar neurons was also inhibited about 80% on tissue culture substrates coated with rMAG. To investigate further the inhibitory activity of MAG in myelin, we purified myelin from MAG-deficient mice and separated octylglucoside extracts of myelin by diethylaminoethyl (DEAE) ion-exchange chromatography. Although there was no significant difference in neurite growth on myelin purified from MAG-/- and MAG+/+ mice, differences were observed in the fractionated material. The major inhibitory peak that is associated with MAG in normal mice was significantly reduced in MAG-deficient mice. These results suggest that although MAG contributes significantly to axon growth inhibition associated with myelin, its lack in MAG-deficient mice is masked by other non-MAG inhibitors. Axon regeneration in these mice was also examined after thoracic lesions of the corticospinal tracts. A very small number of anterogradely labeled axons extended up to 13.2 mm past the lesion in MAG-/- mice. Although there is some enhancement of axon generation, the poor growth after spinal cord injury in MAG-/- mice may be due to the presence of other non-MAG inhibitors. The in vitro studies, however, provide the first evidence that MAG modulates growth cone behavior and inhibits neurite growth by causing growth cone collapse.