Inhibitors of enzymes involved in processing of N-linked oligosaccharides were used to examine biosynthesis and the neurite-promoting activity of proteoglycans produced by and released from dissociated chick embryo spinal cord neurons in vitro. In the cell compartment and in conditioned medium both castanospermine and swainsonine inhibited 3H-glucosamine incorporation into glycoprotein but only castanospermine reduced 3H-glucosamine incorporation into heparan sulphate and chondroitin sulphate proteoglycans. All of the neurite-promoting activity of neuron-conditioned medium that complexed to laminin was associated with heparan sulphate proteoglycans as determined by heparitinase digestion. Neuron-conditioned medium prepared in the presence of castanospermine displayed a 38 +/- 6% (mean +/- SD) reduction in 3H-glucosamine incorporation into heparan sulphate proteoglycans and a 30 +/- 5% reduction in substrate-attached neurite-promoting activity compared to control conditioned medium and to conditioned medium prepared in the presence of swainsonine. When neurons were coincubated with castanospermine, neurite growth on a laminin substrate was 50 +/- 10% of control growth or growth in the presence of swainsonine. However, when neuron-conditioned medium was used to pretreat the laminin substrate the inhibitory effect on neurite growth produced by castanospermine coincubation was reversed. Influences on neuronal processing of N-linked oligosaccharides alter neurite growth directly and also alter the neurite-promoting activity of neuron-conditioned medium by inhibiting the synthesis of heparan sulphate proteoglycans. These studies provide further evidence for an autocrine role for heparan sulphate proteoglycans in neurite growth.