We have characterized N‐acetylaspartylglutamate (NAAG) and found that the peptide inhibits transmitter release by activation of mGluR3 receptors at presynaptic endings. To learn more about the synaptic activity of NAAG, we have synthesized a series of novel compounds that are potent inhibitors of brain NAAG peptidase activity as well as the activity of cloned human and rat glutamate carboxypeptidase II (GCPII), an enzyme that was believed to be solely responsible for inactivation of NAAG following synaptic release. We tested two of these compounds in models of chronic and neuropathic pain and found them to be antinociceptive. We have produced and characterized a strain of GCPII knock‐out mice and discovered a residual NAAG peptidase activity in their brains and spinal cords. They appear quite similar to their wild type littermates in terms of growth, reproduction, basic neurological features, acute pain threshold, rotor rod and open field behavior, and NAAG, glutamate, and mGluR3 mRNA levels. These data support the hypothesis that one or more uncharacterized enzymes may be involved in the inactivation of NAAG. We have found several differences between the NAAG peptidase activity found in the knock‐out vs. wild type brain membranes, including differential sensitivity to the peptidase inhibitor 2‐PMPA. The cloning of an additional gene(s) coding for nervous system NAAG peptidase and the development of selective inhibitors of NAAG peptidase activity have the potential to contribute to understanding the role of NAAG in excitotoxicity and chronic pain perception.