Immunohistochemical studies previously revealed the presence of the peptide transmitter N-acetylaspartylglutamate (NAAG) in spinal motor neurons, axons and presumptive neuromuscular junctions (NMJs). At synapses in the central nervous system, NAAG has been shown to activate the type 3 metabotropic glutamate receptor (mGluR3) and is inactivated by an extracellular peptidase, glutamate carboxypeptidase II. The present study tested the hypothesis that NAAG meets the criteria for classification as a co-transmitter at the vertebrate NMJ. Confocal microscopy confirmed the presence of NAAG immunoreactivity and extended the resolution of the peptide's location in the lizard (Anolis carolinensis) NMJ. NAAG was localised to a presynaptic region immediately adjacent to postsynaptic acetylcholine receptors. NAAG was depleted by potassium-induced depolarisation and by electrical stimulation of motor axons. The NAAG receptor, mGluR3, was localised to the presynaptic terminal consistent with NAAG's demonstrated role as a regulator of synaptic release at central synapses. In contrast, glutamate receptors, type 2 metabotropic glutamate receptor (mGluR2) and N-methyl-d-aspartate, were closely associated with acetylcholine receptors in the postsynaptic membrane. Glutamate carboxypeptidase II, the NAAG-inactivating enzyme, was identified exclusively in perisynaptic glial cells. This localisation was confirmed by the loss of immunoreactivity when these cells were selectively eliminated. Finally, electrophysiological studies showed that exogenous NAAG inhibited evoked neurotransmitter release by activating a group II metabotropic glutamate receptor (mGluR2 or mGluR3). Collectively, these data support the conclusion that NAAG is a co-transmitter at the vertebrate NMJ.