Perineuronal nets (PNNs) are implicated in closure of critical periods of synaptic plasticity in the brain, but the molecular mechanisms by which PNNs regulate synapse development are obscure. A receptor complex of NCAM and EphA3 mediates postnatal remodeling of inhibitory perisomatic synapses of GABAergic interneurons onto pyramidal cells in the mouse frontal cortex necessary for excitatory/inhibitory balance. Here it is shown that enzymatic removal of PNN glycosaminoglycan chains decreased the density of GABAergic perisomatic synapses in mouse organotypic cortical slice cultures. Neurocan, a key component of PNNs, was expressed in postnatal frontal cortex in apposition to perisomatic synapses of parvalbumin-positive interneurons. Polysialylated NCAM (PSA-NCAM), which is required for ephrin-dependent synapse remodeling, bound less efficiently to neurocan than mature, non-PSA-NCAM. Neurocan bound the non-polysialylated form of NCAM at the EphA3 binding site within the immunoglobulin-2 domain. Neurocan inhibited NCAM/EphA3 association, membrane clustering of NCAM/EphA3 in cortical interneuron axons, EphA3 kinase activation, and ephrin-A5-induced growth cone collapse. These studies delineate a novel mechanism wherein neurocan inhibits NCAM/EphA3 signaling and axonal repulsion, which may terminate postnatal remodeling of interneuron axons to stabilize perisomatic synapses in vivo.