D-amino acid oxidase (DAO) catalyzes oxidative deamination of D-amino acids. Since D-amino acids are considered to be rare in eukaryotes, physiological function of this enzyme has been enigmatic for a long time. Mutant mice lacking DAO were found, and their strain was established. The urine of the mutant mice contained large amounts of D-amino acids. D-Amino acids were also present in their organs and blood. The origin of these D-amino acids was pursued. The results indicate that one of the physiological functions of DAO is the metabolism of D-amino acids of internal and external origin. A large amount of D-serine is shown to exist in the brain of mammals. It binds to the coagonist-binding site of N-methyl-D-aspartate (NMDA) subtype of glutamate receptors and enhances the neurotransmission. DAO metabolizes this D-serine and, therefore, modulates neurotransmission. Mutant mice displayed phenotypes resulting from the enhanced NMDA receptor function. Recent studies have shown that DAO is associated with schizophrenia. Mutant mice were resistant to the drugs which act on NMDA receptors and elicit schizophrenia-like symptoms. Recently, mutant rats lacking DAO have also been found. They were free from D-serine-induced nephrotoxicity, indicating involvement of DAO in this toxicity. The mutant mice and rats lacking DAO would be useful for the elucidation of the physiological functions of DAO and the etiology of neuronal diseases associated with DAO.