Gliomas are among the most common tumors of the central nervous system and include highly malignant subtypes, such as glioblastoma, which are associated with poor prognosis. Effective treatments are therefore urgently needed. Despite the recent advances in neuroimaging technologies, differentiating gliomas from other brain diseases such as multiple sclerosis remains challenging in some patients, and often requires invasive brain biopsy. Protein tyrosine phosphatase receptor type Z (PTPRZ) is a heavily glycosylated membrane protein that is highly expressed in the central nervous system. Several reports analyzing mouse tumor models suggest that PTPRZ may have potential as a therapeutic target for gliomas. A soluble cleaved form of PTPRZ (sPTPRZ) in the cerebrospinal fluid is markedly upregulated in glioma patients, making it another promising diagnostic biomarker. Intriguingly, PTPRZ is also involved in the process of remyelination in multiple sclerosis. Indeed, lowered PTPRZ glycosylation by deletion of the glycosyltransferase gene leads to reduced astrogliosis and enhanced remyelination in mouse models of demyelination. Here, we review the expression, molecular structure, and biological roles of PTPRZ. We also discuss glioma and demyelinating diseases, as well as the pathological role of PTPRZ and its application as a diagnostic marker and therapeutic target.