N-Acetylaspartylglutamate (NAAG), known to be present in rat motor neurons, may participate in neuronal modulation of non-quantal secretion of acetylcholine (ACh) from motor nerve terminals. Non-quantal release of ACh was estimated by the amplitude of the endplate membrane hyperpolarization (H-effect) caused by inhibition of nicotinic receptors by (+)-tubocurarine and acetylcholinesterase by armin (diethoxy-p-nitrophenyl phosphate). Application of exogenous NAAG decreased the H-effect in a dose-dependent manner. The reduction of the H-effect by NAAG was completely removed when N-acetyl-β-aspartylglutamate (βNAAG) or 2-(phosphonomethyl)-pentanedioic acid (2-PMPA) was used to inhibit glutamate carboxypeptidase II (GCP II), a presynaptic Schwann cell membrane-associated ectoenzyme that hydrolyzes NAAG to glutamate and N-acetylaspartate. Bath application of glutamate decreased the H-effect similarly to the action of NAAG but N-acetylaspartate was without effect. Inhibition of NMDA receptors by dl-2-amino-5-phosphopentanoic acid, (+)-5-methyl-10,11-dihydro-5H-dibenzocyclohepten-5,10-imine (MK801), and 7-chlorokynurenic acid or inhibition of muscle nitric oxide synthase (NO synthase) by NG-nitro-l-arginine methyl ester and 3-bromo-7-nitroindazole completely prevented the decrease of the H-effect by NAAG. These results suggest that glutamate, produced by enzymatic hydrolysis of bath-applied NAAG, can modulate non-quantal secretion of ACh from the presynaptic terminal of the neuromuscular synapse via activation of postsynaptic NMDA receptors and synthesis of nitric oxide (NO) in muscle fibers. NAAG also increased the frequency of miniature endplate potentials (mEPPs) generated by spontaneous quantal secretion of ACh, whereas the mean amplitude and time constants for rise time and for decay of mEPPs did not change.