Synapsins, a family of synaptic vesicle proteins, have been shown to regulate neurotransmitter release; the mechanism(s) by which they act are not fully understood. Here we have studied the role of domain E of synapsins in neurotransmitter release at the squid giant synapse. Two squid synapsin isoforms were cloned and found to contain a carboxy (C)-terminal domain homologous to domain E of the vertebrate a-type synapsin isoforms. Presynaptic injection of a peptide fragment of domain E greatly reduced the number of synaptic vesicles in the periphery of the active zone, and increased the rate and extent of synaptic depression, suggesting that domain E is essential for synapsins to regulate a reserve pool of synaptic vesicles. Domain E peptide had no effect on the number of docked synaptic vesicles, yet reversibly inhibited and slowed the kinetics of neurotransmitter release, indicating a second role for synapsins that is more intimately associated with the release process itself. Thus, synapsin domain E is involved in at least two distinct reactions that are crucial for exocytosis in presynaptic terminals.