In the present study, we have investigated the function of the receptor protein tyrosine phosphatase α (RPTPα) in the neuronal differentiation of E14-embryonic stem (E14-ES) cells. RNAase protection and western blot analysis revealed that E14-ES cells up regulate RPTPα expression upon neuronal differentiation with retinoic acid. Overexpression of RPTPα, by stable DNA transfection, and subsequent differentiation with retinoic acid, resulted in a temporally enhanced expression of the neuronal markers GAP-43 and NF-164. Electrophysiological experiments demonstrated that RPTPα overexpression also enhanced the development of neurotransmitter responses during differentiation. These results indicate that RPTPα plays an important role in the cascade of molecular events that lead to the formation of neurons.