Dendritic arborization is important for neuronal development as well as the formation of neural circuits. Rac1 is a member of the Rho GTPase family that serve as regulators of neuronal development. Breakpoint cluster region protein (BCR) is a Rac1 GTPase-activating protein that is abundantly expressed in the central nervous system. Here, we show that BCR plays a key role in neuronal development. Dendritic arborization and actin polymerization were attenuated by overexpression of BCR in hippocampal neurons. Knockdown of BCR using specific shRNAs increased the dendritic arborization as well as actin polymerization. The number of dendrites in null mutant BCR(-/-) mice was considerably increased compared with that in wild-type mice. We found that the function of the BCR GTPase-activating domain could be modulated by protein tyrosine phosphatase receptor T (PTPRT), which is expressed principally in the brain. We demonstrate that tyrosine 177 of BCR was the main target of PTPRT and the BCR mutant mimicking dephosphorylation of tyrosine 177 alleviated the attenuation of dendritic arborization. Additionally the attenuated dendritic arborization found upon BCR overexpression was relieved upon co-expression of PTPRT. When PTPRT was knocked down by a specific shRNA, the dendritic arborization was significantly reduced. The activity of the BCR GTPase-activating domain was modulated by means of conversions between the intra- and inter-molecular interactions, which are finely regulated through the dephosphorylation of a specific tyrosine residue by PTPRT. We thus show conclusively that BCR is a novel substrate of PTPRT and that BCR is involved in the regulation of neuronal development via control of the BCR GTPase-activating domain function by PTPRT.