Several plasma membrane chloride channels are well characterized, but much less is known about the molecular identity and function of intracellular Cl- channels. ClC-3 is thought to mediate swelling-activated plasma membrane currents, but we now show that this broadly expressed chloride channel is present in endosomal compartments and synaptic vesicles of neurons. While swelling-activated currents are unchanged in mice with disrupted ClC-3, acidification of synaptic vesicles is impaired and there is severe postnatal degeneration of the retina and the hippocampus. Electrophysiological analysis of juvenile hippocampal slices revealed no major functional abnormalities despite slightly increased amplitudes of miniature excitatory postsynaptic currents. Mice almost lacking the hippocampus survive and show several behavioral abnormalities but are still able to acquire motor skills.