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Polyclonal antibodies were raised in rabbits against N-acetyl-aspartyl-glutamate (NAAG) coupled to bovine serum albumin (BSA) with carbodiimide and were purified by affinity chromatography sequentially over BSA-agarose and NAAG-agarose resins. Solid-phase RIA revealed a distinct pattern of specificity of the antibodies for N-acetylated acidic peptides, with highest signal obtained for NAAG, and essentially no immunoreactivity demonstrable for aspartate or glutamate. Coronal sections through carbodiimide-fixed rat olfactory bulb were incubated with the purified antiserum and antigen localization visualized by the avidin-biotin peroxidase techniques. Immunoreactivity was restricted to the mitral cells, the major excitatory projection neurons of the lateral olfactory tract, a putative glutamatergic pathway. Immunoreactivity was selectively blocked by preincubation of the antibody with 1 microgram/ml of NAAG-BSA. These results demonstrate a specific neuronal localization of NAAG-like immunoreactivity and support the candidacy of NAAG as a neurotransmitter of the lateral olfactory tract.