Using monolayer cultures from murine brain and reaggregate cell cultures of rat anterior pituitary we observed that TRH (pyroGlu-His-Pro-NH2) added to the culture medium was not taken up by these cells but hydrolyzed at the pyroGlu-His bond by an enzyme obviously located at the cell surface. This enzyme exhibited a high degree of substrate specificity and other characteristics of the membrane-bound TRH-degrading enzyme. Relatively high enzymatic activity was associated with cultured neuronal cells from embryonic rat brain while glial cells were almost devoid of this peptidase activity. Rather low, but significant activity was found on anterior pituitary cell aggregates. In agreement with previous in vivo studies we observed that the TRH-degrading ectoenzyme on adenohypophyseal cells was regulated by estradiol and stringently controlled by T3, but that the activity of the brain enzyme was not. When pituitary cells were separated according to their size and density and established in reaggregate cell culture, a close correlation was always observed between enzyme activity and the distribution of lactotrophic cells regardless of the animal models (eu- and hypothyroid adult male rats) used and the cell fractionation techniques (velocity sedimentation and sequential velocity/buoyant density sedimentation) employed. Such a close correlation was not observed with other cell types, such as the somatotrophic cells, the folliculo-stellate cells, the ACTH-producing AtT20 pituitary cells, or thyrotrophic cells. In conclusion, the high degree of substrate specificity, the tissue-specific regulation, and the very heterogeneous distribution of the TRH-degrading ectoenzyme on brain and pituitary cells strongly support the hypothesis that this enzyme serves very specialized functions in the transmission of TRH signals at specific target sites.