Extracellular nucleotides are ubiquitous extracellular mediators that interact with and activate nucleotide type 2 (P2) receptors. These receptors initiate a wide variety of signalling pathways that appear important for functional associations between neurons and glial cells and for the regulation of blood flow, haemostatic and inflammatory reactions in the brain. Ectonucleotidases are extracellular nucleotide-metabolizing enzymes that modulate P2 receptor-mediated signalling by the regulated hydrolysis of these agonists. A considerable number of ectoenzyme species with partially overlapping substrate and tissue distributions have been described. Major candidates for expression in the brain are members of the ecto-nucleoside triphosphate diphosphohydrolase (E-NTPDase or CD39) family. The production of cd39–/–mice and specific reagents have enabled us to analyse the specific cellular distribution of NTPDase1 (CD39), the prototype member of the enzyme family, in the mouse brain. Using monospecific antibodies and enzyme histochemical staining, we have identified NTPDase1 as a major ectonucleotidase associated with both microglia and the endothelial and smooth muscle cells of the vasculature. NTPDase1 is not expressed by neurons and astrocytes. Additional unidentified ectonucleotidase functional activity is observed at lower levels throughout the brain parenchyma. NTPDase1 may regulate P2 receptor-mediated functions of microglia as well as influence nucleotide signalling between neurons or astrocytes that are associated with multiple microglial ramifications. The expression of NTPDase1 by cerebrovascular endothelial and smooth muscle cells also suggests involvement in the regulation of blood flow and thrombogenesis.