1. Introduction. In this paper, we study some aspects of solvability of left invariant differential operators on connected, simply connected nilpotent Lie groups. In Part I, we prove a general necessary condition for microlocal solvability and apply it to the case of a transversally elliptic operator on a 2-step nilpotent Lie group. We show in Part II that for a special class of 2-step groups, the criterion of Part I is also sufficient for local solvability; the main argument here involves the division of distributions by analytic functions. Finally, Part III is devoted primarily to a sufficient condition for the existence of a global fundamental solution; this condition is satisfied for the operators discussed in Part II. We now describe these results in more detail. Let G be a (connected, simply connected) 2-step nilpotent Lie group with Lie algebra g. Then g = g1 0 g2 (a vector space direct sum) with g2 = [g, g] = [g1, gl ]. This grading of g induces a grading of the universal enveloping algebra u(g), u(g) = (30=o u,(g). Thus a left invariant differential operator L E u(g) can be written L = ET0 LL, with Li homogeneous of degree j. In the homogeneous case (L = Lm), criteria for local solvability of L have been given by the authors individually ([21], [3], [4]) and severally ([5]), by Levy-Bruhl ([12], [13], [14]), by Rothschild-Tartakoff ([24]), and by others; a survey of some of these results is found in [18]. In Parts I and II of this paper, we use new techniques to obtain results for non-homogeneous operators. We say that L is tranisversally elliptic (or elliptic in the genieraitinlg directions) if for every nontrivial 1-dimensional unitary representation u of G, a(Lm) * 0. (Note that a 0 on g2.) A differential operator P is locally solvable at xo if there is a neighborhood U of x0 such that the equation