Myelin-associated glycoprotein (MAG) and Schwann cell myelin protein (SMP) are highly glycosylated members of a newly defined family of cell adhesion molecules belonging to the immunoglobulin superfamily that recognize terminal sialic acid residues on N- and O-linked oligosaccharides. The importance of the N-linked oligosaccharides on MAG were determined by removal of the eight predicted carbohydrate addition sites by site-directed mutagenesis. The results suggest that all eight N-linked glycosylation sites are utilized in COS cells. N-linked glycosylation does not appear to be required for sialic acid-dependent MAG binding to erythrocytes. However, N-linked glycosylation of MAG does play a role in the proper folding of MAG. It was also shown that sialylation in the host cell expressing MAG and SMP could inhibit binding to erythrocytes. The degree to which SMP and MAG erythrocyte binding was affected by sialylation in the host cell was dependent on (a) the level at which MAG was expressed on the surface of the host cell and (b) the presence of MAG ligands on the host cell. The data suggest that cis-ligands on the host cell compete with trans-ligands on the target cell for the binding site(s) on MAG.