Glioblastoma multiforme (GBM), the most common malignant primary brain tumor, represents a significant disease burden. GBM tumor cells disperse extensively throughout the brain parenchyma, and the need for tumor-specific drug targets and pharmacologic agents to inhibit cell migration and dispersal is great. The receptor protein tyrosine phosphatase mu (PTPmu) is a homophilic cell adhesion molecule. The full-length form of PTPmu is down-regulated in human glioblastoma. In this article, overexpression of full-length PTPmu is shown to suppress migration and survival of glioblastoma cells. Additionally, proteolytic cleavage is shown to be the mechanism of PTPmu down-regulation in glioblastoma cells. Proteolysis of PTPmu generates a series of proteolytic fragments, including a soluble catalytic intracellular domain fragment that translocates to the nucleus. Only proteolyzed PTPmu fragments are detected in human glioblastomas. Short hairpin RNA-mediated down-regulation of PTPmu fragments decreases glioblastoma cell migration and survival. A peptide inhibitor of PTPmu function blocks fragment-induced glioblastoma cell migration, which may prove to be of therapeutic value in GBM treatment. These data suggest that loss of cell surface PTPmu by proteolysis generates catalytically active PTPmu fragments that contribute to migration and survival of glioblastoma cells.