The placental leucine aminopeptidase (P-LAP)/oxytocinase whose serum level increases with gestation is thought to contribute to the maintenance of normal pregnancy. P-LAP mRNAs are expressed in various tissues other than the placenta. In this study, we identified P-LAP protein in the brain. In contrast with the placenta where a significant portion of P-LAP is released, the enzyme was localized in the membrane fraction in brain and PC12 cells and no soluble form of the enzyme was detected. When PC12 cells were differentiated into neuronal cells by nerve growth factor (NGF), a significant increase in the expression level of P-LAP in the cell was observed. As in the case of insulin treatment of 3T3-L1 adipocytes, treatment of PC12 cells with forskolin caused the translocation of the enzyme from intracellular vesicle to the cell surface plasma membrane. In addition, P-LAP was shown to degrade several bioactive neuropeptides such as Met-enkephalin and dynorphin A (1-8). These results suggest that P-LAP plays an important role in the regulation of neuronal cell function in the brain.