Elucidation of mechanisms by which receptor protein tyrosine phosphatases (PTPs) regulate neurite outgrowth will require characterization of ligand-receptor interactions and identification of ligand-induced signalling components mediating neurite outgrowth. The first identified ligand of the leucocyte common antigen-related (LAR) receptor PTP consists of a 99-residue ectodomain isoform, termed LARFN5C, which undergoes homophilic binding to LAR and promotes neurite outgrowth. We employed peptide mapping of LARFN5C to identify an active neurite-promoting domain of LAR. A peptide mimetic consisting of 37 residues (L59) and corresponding to the fifth LAR fibronectin type III (FNIII) domain prevented LARFN5C homophilic binding, demonstrated homophilic binding to itself and promoted neurite outgrowth of mouse E16-17 hippocampal neurons and of dorsal root ganglia explants. Response to L59 was partially lost when using neurons derived from LAR-deficient (-/-) mice or neurons treated with LAR siRNA, consistent with homophilic interaction of L59 with LAR. L59 neurite-promoting activity was decreased in the presence of inhibitors of Src, Trk, PLCgamma, PKC, PI3K and MAPK. L59 activated Src (a known substrate of LAR), FAK and TrkB and also activated downstream signalling intermediates including PKC, ERK, AKT and CREB. BDNF augmented the maximal neurite-promoting activity of L59, a finding consistent with the presence of shared and distinct signalling pathways activated by L59 with BDNF and L59 with TrkB. These studies are the first to identify an ectodomain of LAR (located within the fifth FNIII domain) capable of promoting neurite outgrowth and point to novel approaches for promotion of neurite outgrowth.