This report demonstrates that the investigational prostatic carcinoma marker known as the prostatespecific membrane antigen (PSM) possesses hydrolytic activity with the substrate and pharmacologic properties of the N-acetylated a-linked acidic dipeptidase (NAALADase). NAALADase is a membrane hydrolase that has been characterized in the mammalian nervous system on the basis of its catabolism of the neuropeptide N-acetylaspartylglutamate (NAAG) to yield glutamate and N-acetylaspartate and that has been hypothesized to influence glutamatergic signaling processes. and/or related molecular species appear to account for NAAG hydrolysis in the nervous system. These results also raise questions about the role of PSM in both normal and pathologic prostate epithelial-cell function.