Naphthylamidase activity was studied in rat molar and incisor teeth at different stages of development. L-leucyl-4-methoxy-2-naphthylamide, L-alanyl-4-methoxy-2-naphthylamide, L-leucyl-2-naphthylamide and DL-alanyl-2-naphthylamide were used as substrates and Fast blue B and Fast Garnet GBC as diazonium salts. Naphthylamidase was not demonstrable in the teeth during enamel matrix formation. After the termination of this stage, naphthylamidase was present in the ameloblasts in their distal ends close to the enamel surface. The enzyme activity retained this localization until the dental epithelium fused with the oral epithelium at the time of tooth eruption into the oral cavity. Naphthylamidase was not found in other dental tissues, but marked activity was found in osteoclasts at the resorbing surfaces of alveolar bone surrounding the developing and erupting teeth and in certain areas of the connective tissue.