During neural circuit formation, most axons are guided to complex environments, coming into contact with multiple potential synaptic partners. However, it is critical that they recognize specific neurons with which to form synapses. Here, we utilize the split GFP-based marker Neuroligin-1 GFP Reconstitution Across Synaptic Partners (NLG-1 GRASP) to visualize specific synapses in live animals, and a circuit-specific behavioral assay to probe circuit function. We demonstrate that the receptor protein tyrosine phosphatase (RPTP) clr-1 is necessary for synaptic partner recognition (SPR) between the PHB sensory neurons and the AVA interneurons in C. elegans. Mutations in clr-1/RPTP result in reduced NLG-1 GRASP fluorescence and impaired behavioral output of the PHB circuit. Temperature-shift experiments demonstrate that clr-1/RPTP acts early in development, consistent with a role in SPR. Expression and cell-specific rescue experiments indicate that clr-1/RPTP functions in postsynaptic AVA neurons, and overexpression of clr-1/RPTP in AVA neurons is sufficient to direct additional PHB-AVA synaptogenesis. Genetic analysis reveals that clr-1/RPTP acts in the same pathway as the unc-6/Netrin ligand and the unc-40/DCC receptor, which act in AVA and PHB neurons, respectively. This study defines a new mechanism by which SPR is governed, and demonstrates that these three conserved families of molecules, with roles in neurological disorders and cancer, can act together to regulate communication between cells.