Despite clear indications of their importance in lower organisms, the contributions of protein tyrosine phosphatases (PTPs) to development or function of the mammalian nervous system have been poorly explored. In vitro studies have indicated that receptor protein tyrosine phosphatase alpha (RPTPalpha) regulates SRC family kinases, potassium channels and NMDA receptors. Here, we report that absence of RPTPalpha compromises correct positioning of pyramidal neurons during development of mouse hippocampus. Thus, RPTPalpha is a novel member of the functional class of genes that control radial neuronal migration. The migratory abnormality likely results from a radial glial dysfunction rather than from a neuron-autonomous defect. In spite of this aberrant development, basic synaptic transmission from the Schaffer collateral pathway to CA1 pyramidal neurons remains intact in Ptpra(-/-) mice. However, these synapses are unable to undergo long-term potentiation. Mice lacking RPTPalpha also underperform in the radial-arm water-maze test. These studies identify RPTPalpha as a key mediator of neuronal migration and synaptic plasticity.