Extracellular matrix (ECM) molecules and their cleavage products critically regulate the growth and arborization of neurites of neuronal cells. Versican is one of the major ECM molecules in the brain and versican G3-containing fragments are found in human astrocytoma. In addition, versican G3 peptides promote the growth of various non-neuronal cells. I hypothesized that the versican G3 domain regulates central synaptic formation and transmission. I found that: (1) versican G3 domain, but not a G3 mutant that lacks two epithelial growth factor (EGF) motifs, enhanced neurite outgrowth, glutamate-evoked currents, and miniature excitatory postsynaptic currents, as well as the surface expression and total protein levels of glutamate receptors in cultured hippocampal neurons; and (2) the effects of G3 on neurite growth and glutamate-currents were significantly reduced by blocking the EGF receptor. I conclude that the versican G3 domain regulates glutamatergic synaptic formation and transmission, possibly via an EGF receptor-mediated signaling pathway.