The receptor-type protein tyrosine phosphatase PTPσ mediates neural development and regeneration. Early studies on the ligands of PTPσ identified heparan sulfate proteolycan (HSPG) as a ligand. Binding of HSPG to PTPσ plays a critical role in axon guidance and synapse formation. PTPσ is also a receptor for chondroitin sulfate proteoglycan (CSPG). CSPG is deposited in high concentration at sites of neural injury. The deposited CSPG inhibits neural regeneration and axonal growth via PTPσ. The crystal structure of N-terminal immunoglobulin-like domains of PTPσ shows that the glycan binding site forms an elliptical surface patch of ∼35 by 24 Å, which interacts with sulfate groups of HSPG and CSPG. In this review, we focus on the structural and functional mechanisms for the neural regeneration regulation by different types of proteoglycans. We also discuss recent results on induction of neural regeneration in the stroke model and neural transplantation. The mechanistic understanding of relationships between proteoglycans and PTPσ provides new therapeutic opportunities against diseases with impaired neural regeneration.