The unusual carbohydrate polysialic acid (PSA), attached uniquely to neural cell adhesion molecule (NCAM) through a developmentally regulated process, modulates neural cell interactions. Major advances in the past two years have increased our understanding of PSA biosynthesis and regulation. Of particular interest is the cloning of the genes encoding polysialyltransferases (PSTs) and the finding that a single enzyme is able to confer polysialylation to NCAM. The electrical activity of neurons and transmembrane signalling are probably major players in controlling both PSA biosynthesis and its expression at the cell surface. A direct causal relationship between PSA expression and activity-induced synaptic plasticity has been reported.