Alpha-bag cell peptide [alpha-BCP (Ala-Pro-Arg-Leu-Arg-Phe-Tyr-Ser-Leu)] is a neurotransmitter that mediates bag cell-induced inhibition of left-upper-quadrant (LUQ) neurons L2, L3, L4, and L6 in the abdominal ganglion of Aplysia. Our recent biochemical studies have shown that alpha-BCP[1-9] is cleaved into alpha-BCP[1-2], [3-9], [1,5], [6-9], and [7-9] by a combination of three distinct peptidase activities located within the extracellular spaces of the CNS: A diaminopeptidase-IV (DAP-IV)-like enzyme cleaves alpha-BCP[1-9] at the 2-3 peptide bond; a neutral metalloendopeptidase (NEP)-like enzyme cleaves either alpha-BCP[1-9] or alpha-BCP[3-9] at the 5-6 bond; an aminopeptidase M-II (APM-II)-like enzyme cleaves alpha-BCP[6-9] at the 6-7 bond, but cleaves neither alpha-BCP[1-9], nor the other ganglionic peptidase products. To further understand the manner in which alpha-BCP is inactivated after release, that is loses its electrophysiological activity, we studied its structure-activity relationship by recording intracellularly from LUQ neurons in isolated abdominal ganglia that were arterially perfused with peptides dissolved in artificial sea water. The effects of alpha-BCP[1-9] and 15 of its fragments ([1-8], [1-7], [1-6], [1-5], [2-9], [3-9], [3-8], [6-9], [7-9], [8-9], [6-7], [6-8], [1-2], Phe, Tyr) indicated that the sequence Phe6-Tyr7 was both necessary and sufficient to produce LUQ inhibitory activity. The combined results of our electrophysiological and biochemical studies strongly suggest that alpha-BCP[1-9] is inactivated by the serial actions of the NEP-like and APM-II-like peptidases; that is, the NEP-like enzyme yields an electrophysiologically active product, alpha-BCP[6-9], that is cleaved by the APM-II-like enzyme to yield inactive alpha-BCP[7-9]. Furthermore, because alpha-BCP[6-9] is more active than alpha-BCP[1-9], cleavage by the NEP-like enzyme potentiates alpha-BCP's activity.