Hydrolysis of the neuropeptide N-acetyl-L-aspartyl-L-glutamate (NAAG) by N-acetylated alpha-linked acidic dipeptidase (NAALADase) to release glutamate may be important in a number of neurodegenerative disorders in which excitotoxic mechanisms are implicated. The gene coding for human prostate-specific membrane antigen, a marker of prostatic carcinomas, and its rat homologue glutamate carboxypeptidase II have recently been shown to possess such NAALADase activity. In contrast, a closely related member of this gene family, rat ileal 100-kDa protein, possesses a dipeptidyl peptidase IV activity. Here, we describe the cloning of human ileal 100-kDa protein, which we have called a NAALADase- "like" (NAALADase L) peptidase based on its sequence similarity to other members of this gene family, and its inability to hydrolyze NAAG in transient transfection experiments. Furthermore, we describe the cloning of a third novel member of this gene family, NAALADase II, which codes for a type II integral membrane protein and which we have localized to chromosome 11 by fluorescent in situ hybridization analysis. Transient transfection of NAALADase II cDNA confers both NAALADase and dipeptidyl peptidase IV activity to COS cells. Expression studies using reverse transcription-polymerase chain reaction and Northern blot hybridization show that NAALADase II is highly expressed in ovary and testis as well as within discrete brain areas.