Thy-1 is abundantly expressed in the vertebrate nervous system. Perturbation studies in vitro suggest that Thy-1 inhibits neurite outgrowth and stabilizes neuronal processes (N. K. Mahanthappa and P. H. Patterson. (1992). Thy-1 involvement in neurite outgrowth: Perturbation by antibodies, phospholipase C, and mutation. Dev. Biol. 150,47-59). We here report that Thy-1 participates in several types of homophilic interactions, each with differential sensitivity to reduction and boiling. The relative abundance of the multimeric forms of Thy-1 vary with the cell's ability to sprout neurites. Gel filtration chromatography of sympathetic neuron and PC12 cell lysates reveals that Thy-1 immunoreactivity appears in 25-, 45-, and 150-kDa forms. In neurons, Thy-1 immunoreactivity is distributed equally in all three forms, whereas in PC12 cells, the majority of Thy-1 immunoreactivity is found in the higher molecular weight forms. When PC12 cells are induced to sprout neurites with NGF, the Thy-1 size distribution becomes identical to that of neurons. The three forms of Thy-1 immunoreactivity are likely to be homomultimers of Thy-1 because immunoaffinity-purified, soluble Thy-1 also forms complexes similar in size to those found in neuronal extracts. To test whether Thy-1 multimerization may occur through interactions like those between immunoglobulin heavy and light chains, synthetic peptides corresponding to candidate sites for such associations in Thy-1 were tested for their effects on multimerization and neurite outgrowth. One peptide increases the amount of monomeric Thy-1 relative to total Thy-1, and promotes outgrowth. These results suggest that multimeric forms of Thy-1 inhibit process outgrowth and neurite sprouting by stabilizing the surface membrane and/or underlying cytoskeleton.