Both hyaluronan [HA, the major glycosaminoglycans in the extracellular matrix (ECM)] and CD44 (a primary HA receptor) are associated with astrocyte activation and tissue repair following central nervous system (CNS) injury. In this study we investigated the question of whether HA-CD44 interaction influences astrocyte signaling and migration. Our data indicated that HA binding to the cultured astrocytes stimulated Rac1 signaling and cytoskeleton-mediated migration. To determine the cellular and molecular basis of these events, we focused on PKN gamma, a Rac1-activated serine/threonine kinase in astrocytes. We determined that HA binding to astrocytes stimulated Rac1-dependent PKN gamma kinase activity which, in turn, up-regulated the phosphorylation of the cytoskeletal protein, cortactin, and attenuated the ability of cortactin to cross-link F-actin. Further analyses indicated that the N-terminal antiparallel coiled-coil (ACC) domains of PKN gamma interacted with Rac1, and transfection of astrocytes with PKN gamma-ACCcDNA inhibited PKN gamma activity. Over-expression of the PKN gamma-ACC domain also functions as a dominant-negative mutant to block HA/CD44-mediated PKN gamma activation of cortactin and astrocyte migration. Taken together, these findings strongly suggest that hyaluronan/CD44 interaction with Rac1-PKN gamma plays a pivotal role in cytoskeleton activation and astrocyte migration. These newly discovered HA/CD44-induced astrocyte function may provide important insight into novel therapeutic treatments for tissue repair following CNS injury.