The peptide neurotransmitter, N-acetylaspartylglutamate (NAAG), is a selective agonist at the type 3 metabotropic glutamate receptor (mGluR3) where it acts to decrease cAMP levels. Rat cortical interneurons express both NAAG and glutamic acid decarboxylase, as well as mGluR3 mRNA. In the presence of ionotropic glutamate receptor antagonists, both NAAG and the group II metabotropic glutamate receptor agonist, DCG-IV, reduced the calcium-dependent, KCl-induced [3H]-GABA release from rat cortical neurons by 35%. This release process was unaffected by tetrodotoxin. The group II antagonist, ethyl glutamate, reversed the effects of DCG-IV and NAAG. The mGluR3-selective antagonist, β-N-acetylaspartylglutamate, reversed the effect of NAAG. While pretreatment of cortical neurons with forskolin alone did not significantly affect KCl-stimulated [3H]-GABA-release, forskolin abolished the inhibition of release produced by NAAG. The protein kinase A inhibitor, H-89, decreased [3H]-GABA release while NAAG produced no additional inhibition in the presence of H-89. In contrast, the protein kinase C inhibitor, Ro 31–8220, had no effect on KCl-stimulated release, nor did it affect the inhibition of release produced by NAAG. The L-type calcium channel blocker, nifedipine, also inhibited the release of [3H]-GABA and coapplication with NAAG resulted in no significant additional inhibition of release. These data support the hypothesis that the inhibition of KCl-stimulated [3H]-GABA release by NAAG is mediated via presynaptic mGluR3 on GABAergic cortical neurons and that this effect is obtained by decreasing cAMP with a consequent decrease in protein kinase A activity and L-type calcium channel conductance.