Schwann cells transplantation has considerable promise in spinal cord trauma to bridge the site of injury and for remyelination in demyelinating conditions. They support axonal regeneration and sprouting by secreting growth factors and providing a permissive surface and matrix molecules while shielding axons from the inhibitory environment of the central nervous system. However, following transplantation Schwann cells show limited migratory ability and they are unable to intermingle with the host astrocytes. This in turn leads to formation of a sharp boundary and an abrupt transition between the Schwann cell graft and the host tissue astrocytes, therefore preventing regenerating axons from exiting the graft. The objective of this study was to identify inhibitory elements on astrocytes involved in restricting Schwann cell migration. Using in vitro assays of cell migration, we show that aggrecan produced by astrocytes is involved in the inhibition of Schwann cell motility on astrocytic monolayers. Knockdown of this proteoglycan in astrocytes using RNAi or digestion of glycosaminglycan chains on aggrecan improves Schwann cell migration. We further show aggrecan mediates its effect by disruption of integrin function in Schwann cells, and that the inhibitory effects of aggrecan can overcome by activation of Schwann cell integrins.