Pyroglutamate aminopeptidase II is a highly specific membrane-bound ectopeptidase proposed to inactivate thyrotropin releasing hormone (TRH) in brain extracellular space. Its activity was measured in primary cell cultures of fetal brain in an attempt to define its cellular localization. Enzyme activity was detected in hypothalamic or cortical cell membrane fractions from 4- to 12-day-old cultures. When proliferation of nonneuronal cells was abolished by cytosine arabinoside treatment, pyroglutamate aminopeptidase II specific activity was increased as compared to untreated cultures, the opposite was observed for pyroglutamate amino-peptidase I activity. Treatment of cortical cells with the neurotoxic agent glutamate reduced simultaneously pyroglutamate aminopeptidase II and glutamate decarboxylase activities. Glial cell cultures expressed pyroglutamate aminopeptidase I or glutamate synthase activities but not pyroglutamate aminopeptidase II. The data suggest that pyroglutamate aminopeptidase II is predominantly localized in neuronal cells. This is consistent with a role for pyroglutamate aminopeptidase II in TRH-ergic synaptic transmission.