N‐acetylated α‐linked acidic dipeptidase (NAALADase) is a membrane bound enzyme that cleaves glutamate from the endogenous neuropeptide N‐acetyl‐aspartyl‐glutamate (NAAG). We report the immunocytochemical localization of NAALADase in rat brain and kidney by using specific anti‐NAALADase antiserum. NAALADase‐immunoreactivity (NAALADase‐IR) was widely distributed, abundant in neuropil, absent from neuronal cytoplasm, and displayed regional heterogeneity. Staining was selectively enriched in several structures previously reported to contain NAAG‐immunoreactivity (NAAG‐IR) including the amygdala, caudate‐putamen, central gray, dorsal raphe, globus pallidus, hippocampus, hypothalamus, locus coerulus, medial and lateral geniculate, olfactory bulb, periaqueductal gray, solitary nucleus, spinal trigeminal nucleus, substantia nigra, superior colliculus, and thalamus. Staining within these structures was enriched in neuropil; no intracellular staining was detected, even after colchicine treatment. In addition, NAALADase‐IR was observed in some NAAG‐containing fiber tracts including the corpus callosum, fornix, habenular commissure, solitary tract, stria medularis, and stria terminals. The co‐localization of NAALADase‐IR and NAAG‐IR support the hypothesis that NAALADase is responsible for the catabolism of NAAG in vivo. NAALADase‐IR was also detected in brain regions that, to date, have not revealed NAAG‐IR, including the bed nucleus of the stria terminalis and the median eminence. In addition, NAALADase‐IR was detected in the rat kidney cortex, specifically in the brush border of the proximal convoluted tubules. The observation that NAALADase‐IR was more widespread than NAAG‐IR suggests that NAALADase may also be involved in the catabolism of other structurally related neural and renal peptides.