Receptor protein tyrosine phosphatase alpha (RPTP alpha) phosphatase activity is required for intracellular signaling cascades that are activated in motile cells and growing neurites. Little is known, however, about mechanisms that coordinate RPTP alpha activity with cell behavior. We show that clustering of neural cell adhesion molecule (NCAM) at the cell surface is coupled to an increase in serine phosphorylation and phosphatase activity of RPTP alpha. NCAM associates with T- and L-type voltage-dependent Ca2+ channels, and NCAM clustering at the cell surface results in Ca2+ influx via these channels and activation of NCAM-associated calmodulin-dependent protein kinase II alpha (CaMKII alpha). Clustering of NCAM promotes its redistribution to lipid rafts and the formation of a NCAM-RPTP alpha-CaMKII alpha complex, resulting in serine phosphorylation of RPTP alpha by CaMKII alpha. Overexpression of RPTP alpha with mutated Ser180 and Ser204 interferes with NCAM-induced neurite outgrowth, which indicates that neurite extension depends on NCAM-induced up-regulation of RPTP alpha activity. Thus, we reveal a novel function for a cell adhesion molecule in coordination of cell behavior with intracellular phosphatase activity.