Canavan disease, an autosomal recessive disorder, is characterized biochemically by N-acetylaspartic aciduria and aspartoacylase (N-acyl-L-aspartate amidohydrolase; EC 3.5.1.15) deficiency. However, the role of aspartoacylase and N-acetylaspartic acid in brain metabolism is unknown. Aspartoacylase has been purified to apparent homogeneity with a specific activity of approximately 19,000-20,000 nmol of aspartate released/mg of protein. The native enzyme is a 58-kDa monomer. The purified aspartoacylase activity is enhanced by divalent cations, nonionic detergents, and dithiothreitol. Low levels of dithiothreitol or beta-mercaptoethanol are required for enzyme stability. Aspartoacylase has a Km of 8.5 x 10(-4) M and a Vmax of 43,000 nmol/min/mg of protein. Inhibition of aspartoacylase by glycyl-L-aspartate and amino derivatives of D-aspartic acid suggests that the carbon backbone of the substrate is primarily involved in its interaction with the active site and that a blocked amino group is essential for the catalytic activity of aspartoacylase. Biochemical and immunocytochemical studies revealed that aspartoacylase is localized to white matter, whereas the N-acetylaspartic acid concentration is threefold higher in gray matter than in white matter. Our studies so far indicate that aspartoacylase is conserved across species during evolution and suggest a significant role for aspartoacylase and N-acetylaspartic acid in normal brain biology.