Nucleotides such as ATP, ADP, UTP or the diadenosine polyphosphates and possibly even NAD + are extracellular signaling substances in the brain and in other tissues. Enzymes located on the cell surface catalyze the hydrolysis of these compounds and thus limit their spatio-temporal activity. As a final hydrolysis product they generate the nucleoside and phosphate. The paper discusses the biochemical properties, cellular localization and functional properties of surface-located enzymes that hydrolyse nucleotides released from nervous tissue. This is preceded by a brief discussion of nucleotide receptors, cellular storage and mechanisms of nucleotide release. In nervous tissue nucleoside 5′-triphosphates are hydrolysed by ecto-ATP-diphosphohydrolase and possibly in addition also by ecto-nucleoside triphosphatase and ecto-nucleoside diphosphatase. The molecular identity of the ATP-diphosphohydrolase has now been revealed. The hydrolysis of nucleoside 5′-monophosphates is catalysed by 5′-nucleotidase whose biochemical properties and molecular structure have been studied in detail. Little is known about the molecular properties of the diadenosine polyphosphatases. Surface located enzymes for the extracellular hydrolysis of NAD + and also ecto-protein kinases are discussed briefly. The cellular localization of the ecto-nucleotidases is only partly defined. Whereas in adult mammalian brain activity for hydrolysis of ATP and ADP may be associated with nerve cells or glial cells 5′-nucleotidase appears to have a preferential glial allocation in the adult mammal. The extracellular hydrolysis of the nucleotides is of functional importance not only during synaptic transmission where it functions in signal elimination. It plays a crucial role also for the survival and differentiation of neural cells in vitro and presumably during neuronal development in vivo. Copyright © 1996 Elsevier Science Ltd.