Myelin-associated glycoprotein (MAG) is a potent inhibitor of axonal regeneration. It contains five Ig-like domains and is a sialic binding protein. Previously, we showed that the sialic acid binding site on MAG maps to arginine 118 in Ig domain 1 (Kelm et al., 1994). However, sialic acid binding was neither necessary nor sufficient for MAG to bring about inhibition of neurite outgrowth. Consistent with this, we now map a distinct inhibition site on MAG to Ig domain 5 (Ig-5). We show that when a truncated form of MAG missing Ig domains 1 and 2 is expressed by Chinese hamster ovary (CHO) cells, it does not bind sialic acid, but still inhibits neurite outgrowth almost as effectively as full-length MAG. To determine whether the inhibition site mapped to Ig-3, Ig-4, or Ig-5, we made chimeric molecules of various combinations of these three MAG Ig domains fused to Ig domains from another Ig family member, sialoadhesin (Sn), which also binds to sialic acid in the same linkage as MAG. The MAG-Sn molecules were expressed in CHO cells and all contained five Ig domains and were able to bind sialic acid. However, only the chimeric molecules containing MAG Ig-5 inhibited neurite outgrowth. Furthermore, peptides corresponding to sequences in MAG Ig-5, but not Ig-4 or Sn Ig-5, are able to block inhibition of neurite outgrowth by both wild-type MAG and CNS myelin. We conclude that the inhibition site on MAG is carried by Ig domain 5 and that this site is distinct from the sialic-acid binding site.