Localization of presynaptic components to synaptic sites is critical for hippocampal synapse formation. Cell adhesion-regulated signaling is important for synaptic development and function, but little is known about differentiation of the presynaptic compartment. In this study, we describe a pathway that promotes presynaptic development involving p120catenin (p120ctn), the cytoplasmic tyrosine kinase Fer, the protein phosphatase SHP-2, and beta-catenin. Presynaptic Fer depletion prevents localization of active zone constituents and synaptic vesicles and inhibits excitatory synapse formation and synaptic transmission. Depletion of p120ctn or SHP-2 similarly disrupts synaptic vesicle localization with active SHP-2, restoring synapse formation in the absence of Fer. Fer or SHP-2 depletion results in elevated tyrosine phosphorylation of beta-catenin. beta-Catenin overexpression restores normal synaptic vesicle localization in the absence of Fer or SHP-2. Our results indicate that a presynaptic signaling pathway through p120ctn, Fer, SHP-2, and beta-catenin promotes excitatory synapse development and function.