The activation of synaptic N-methyl-d-aspartate-receptors (NMDARs) is crucial for induction of synaptic plasticity and supports cell survival, whereas activation of extrasynaptic NMDARs inhibits long-term potentiation and triggers neurodegeneration. A soluble polysialylated form of the neural cell adhesion molecule (polySia-NCAM) suppresses signaling through peri-/extrasynaptic GluN2B-containing NMDARs. Genetic or enzymatic manipulations blocking this mechanism result in impaired synaptic plasticity and learning, which could be repaired by reintroduction of polySia, or inhibition of either GluN1/GluN2B receptors or downstream signaling through RasGRF1 and p38 MAP kinase. Ectodomain shedding of NCAM, and hence generation of soluble NCAM, is controlled by metalloproteases of a disintegrin and metalloprotease (ADAM) family. As polySia-NCAM is predominantly associated with GABAergic interneurons in the prefrontal cortex, it is noteworthy that EphrinA5/EphA3-induced ADAM10 activity promotes polySia-NCAM shedding in these neurons. Thus, in addition to the well-known regulation of synaptic NMDARs by the secreted molecule Reelin, shed polySia-NCAM may restrain activation of extrasynaptic NMDARs. These data support a concept that GABAergic interneuron-derived extracellular proteins control the balance in synaptic/extrasynaptic NMDAR-mediated signaling in principal cells. Strikingly, dysregulation of Reelin or polySia expression is linked to schizophrenia. Thus, targeting of the GABAergic interneuron-principle cell communication and restoring the balance in synaptic/extrasynaptic NMDARs represent promising strategies for treatment of psychiatric diseases.