A role for neutral endopeptidase 24.11 (NEP) in growth and development is supported by the demonstration that NEP hydrolyses and inactivates a number of peptide growth factors including atrial natriuretic peptide, endothelins, bombesin-like peptides, and opioid peptides, including the enkephalins. In the present study, suspensions of cells obtained from the ventral mesencephalon or cortex of rat embryos (ED14) were implanted into the striatum of the adult rat brain. Three to 15 weeks after transplantation the relative distribution of NEP-positive cellular elements was visualized histochemically. NEP staining in the transplants consistently appeared before NEP staining in the surrounding host striatum supporting a relative increase in NEP activity in the transplants. The NEP staining richly visualized cells of varying size and morphology which lacked the normal organization of the host striatum. The histochemical staining in the transplants and the surrounding host tissue was completely blocked by a 100 nM concentration of the selective NEP inhibitors phosphoramidon or JHF-26, supporting the exclusive localization of NEP by this method. NEP localization in the embryonic (ED14) cortex and ventral mesencephalon was also confirmed, suggesting one possible origin for the NEP-positive cells visualized in the transplants. Fluorescent double-labeling studies for NEP and glial fibrillary acidic protein (GFAP) or transforming growth factor alpha precursor (TGF alpha p) revealed the presence of rich glial labeling within the transplants for both GFAP and TGFap. NEP-labeled cells in the transplants were closely associated with glial elements, however, only occasional glial elements in the transplants stained for NEP; supporting a non-astrocytic localization for the NEP in the transplants. The marked enhancement of NEP staining in the transplants may have significance for controlling the rate or pattern of growth of the transplanted cells through inactivation of peptide growth factors produced by, or in response to, the transplants.