Metalloendoproteases have been implicated in the calcium-dependent exocytosis of histamine from mast cells and in the calcium-dependent fusion of myoblasts. Because metalloendoproteases have also been identified in nervous tissue, we investigated the possibility that these proteases may be involved in neurotransmitter release at mammalian synapses. End-plate potentials were recorded intracellularly from mouse diaphragm/phrenic nerve preparations in vitro. The amplitude of the endplate potentials were reduced by as much as 90% during bath application of phosphoramidon, a specific inhibitor of metalloendoproteases, and by carbobenzoxy-dipeptide-amide synthetic substrates for metalloendoproteases. Only those synthetic dipeptides in which the amino group of the peptide bond was provided by a bulky hydrophobic amino acid, such as phenylalanine or leucine, which are substrates for metalloendoproteases, reduced synaptic transmission. Synthetic substrates in which proline or glycine provided the amino group of the peptide bond, which are not metalloendoprotease substrates, had little or no effect on the amplitude of end-plate potentials. The ability of synthetic substrates to reduce synaptic transmission was also dependent on the amino acid that provided the carboxyl group of the peptide bond, with glycine being more effective than tyrosine or serine. In addition, synthetic dipeptides with free carboxyl or amino termini, which have a low affinity for metalloendoproteases, also had little effect on synaptic transmission. The inhibition of synaptic transmission by phosphoramidon and the synthetic substrates occurred within 2 to 3 min and was completely reversible. Neither phosphoramidon nor the synthetic substrates altered the dose-response characteristics of the postsynaptic membrane to bath-applied carbachol. These results suggest that synaptic transmission requires the activity of a metalloendoprotease in the presynaptic nerve terminal and that proteolysis may be an important step during neurotransmitter exocytosis.