N-Acetylaspartylglutamate (NAAG) is an agonist at the type 3 metabotropic glutamate receptor (mGluR3), which is coupled to a Gi/o protein. When activated, the mGluR3 receptor inhibits adenylyl cyclase and reduces the cAMP-mediated second-messenger cascade. Long-term potentiation (LTP) in the medial perforant path (MPP) of the hippocampal dentate gyrus requires increases in cAMP. The presence of mGluR3 receptors and NAAG in neurons of the dentate gyrus suggests that this peptide transmitter may inhibit LTP in the dentate gyrus. High-frequency stimulation (100 Hz; 2 s) of the MPP resulted in LTP of extracellularly recorded excitatory postsynaptic potentials at the MPP-granule cell synapse of rat hippocampal slices. Perfusion of the slice with NAAG (50 and 200 microM) blocked LTP. Neither 50 nor 200 microM NAAG produced N-methyl-D-aspartate receptor currents in the granule cells of the acute hippocampal slice. The group II mGluR antagonist ethyl glutamate (100 microM) and a structural analogue of NAAG, beta-NAAG (100 microM), prevented the blockade of LTP by NAAG. Paired-pulse depression of the excitatory postsynaptic potential at 20- and 80-ms interpulse intervals (IPI) was not affected by NAAG or beta-NAAG. beta-NAAG did not affect inositol trisphosphate production stimulated by the agonist glutamate in cells expressing the group I mGluR1alpha or mGluR5. beta-NAAG blocked the decrease in forskolin-stimulated cAMP by the group II mGluR agonist (2S,2'R,3'R)-2-(2',3'-dicarboxycyclopropyl)glycine (DCG-IV) but not the group III mGluR agonist L(+)-2-amino-4-phosphonobutyric acid in cerebellar granule cells. In cells transfected with mGluR3, but not mGluR2, beta-NAAG blocked forskolin-stimulated cAMP responses to glutamate, NAAG, the nonspecific group I, II agonist trans-ACPD, and the group II agonist DCG-IV. We conclude that beta-NAAG is a selective mGluR antagonist capable of differentiating between mGluR2 and mGluR3 subtypes and that the mGluR3 receptor functions to regulate activity-dependent synaptic potentiation in the hippocampus.