Cell adhesion molecule-like receptor-type protein tyrosine phosphatases have been shown to be important for neurite outgrowth and neural development in several animal models. We have previously reported that in leucocyte common antigen-related (LAR) phosphatase deficient (LAR-ΔP) mice the number and size of basal forebrain cholinergic neurons, and their innervation of the hippocampal area, is reduced. In this study we compared the sprouting response of LAR-deficient and wildtype neurons in a peripheral and a central nervous system lesion model. Following sciatic nerve crush lesion, LAR-ΔP mice showed a delayed recovery of sensory, but not of motor, nerve function. In line with this, neurofilament-200 immunostaining revealed a significant reduction in the number of newly outgrowing nerve sprouts in LAR-ΔP animals. Morphometric analysis indicated decreased axonal areas in regenerating LAR-ΔP nerves when compared to wildtypes. Nonlesioned nerves in wildtype and LAR-ΔP mice did not differ regarding myelin and axon areas. Entorhinal cortex lesion resulted in collateral sprouting of septohippocampal cholinergic fibres into the dentate gyrus outer molecular layer in both genotype groups. However, LAR-ΔP mice demonstrated less increase in acetylcholinesterase density and fibre number at several time points following the lesion, indicating a delayed collateral sprouting response. Interestingly, a lesion-induced reduction in number of (septo-entorhinal) basal forebrain choline acetyltransferase-positive neurons occurred in both groups, whereas in LAR-ΔP mice the average cell body size was reduced as well. Thus, regenerative and collateral sprouting is significantly delayed in LAR-deficient mice, reflecting an important facilitative role for LAR in peripheral and central nervous system axonal outgrowth.