LAMP5 is member of the LAMP family of membrane proteins. In contrast to the canonical members of this protein family, LAMP1 and LAMP2, which show widespread expression in many tissues, LAMP 5 is brain specific in mice. In C. elegans, the LAMP5 ortholog UNC-46 has been suggested to act a trafficking chaperone, essential for the correct targeting of the nematode vesicular GABA-transporter UNC-47. We show here that in the mouse brain LAMP5 is expressed in subpopulations of GABAergic forebrain neurons in the striato-nigral system and the olfactory bulb. The protein was present at synaptic terminals, overlapping with the mammalian vesicular GABA-transporter VGAT. In LAMP5-deficient mice localization of the transporter was unaffected arguing against a conserved role in VGAT trafficking. Electrophysiological analyses in mutants showed alterations in short term synaptic plasticity suggesting that LAMP5 is involved in controlling the dynamics of evoked GABAergic transmission. At the behavioral level, LAMP5 mutant mice showed decreased anxiety and deficits in olfactory discrimination. Altogether, this work implicates LAMP5 function in GABAergic neurotransmission in defined neuronal subpopulations.