Glutamate carboxypeptidase II (GCPII; EC 18.104.22.168) is a Zn2+-dependent metalloprotease of the M28 peptidase family. It is also known as prostate-specific membrane antigen, N-acetylated-α-linked acidic dipeptidase, or folate hydrolase I. In the brain, the enzyme cleaves the peptide neurotransmitter N-acetyl-l-aspartyl-l-glutamate (NAAG) into N-acetyl-l-aspartate and free glutamate, a potent and potentially neurotoxic neurotransmitter. The folate hydrolase activity of GCPII facilitates the absorption of dietary folates in the small intestine by cleaving γ-linked glutamates from folyl-poly-γ-glutamates. While the physiological function of GCPII in the prostate is not known, its expression levels are elevated in metastatic prostate carcinoma. Furthermore, the enzyme is also expressed in the cancer-associated neovasculature of most solid tumors. In the nervous system, GCPII inhibition leads to an increase in NAAG concentration and has been shown to be neuroprotective in animal models of ischemic or traumatic brain injury, neuropathic pain, or amyotrophic lateral sclerosis. In tumors, GCPII represents a very promising target for specific diagnostics, imaging, and targeted delivery of anticancer drugs. The present chapter reviews the expression of GCPII in various tissues, its splice variants, orthologs, and paralogs, and summarizes available information on the physiological function and proteolytic activity of the enzyme. Furtermore, its 3-D structure, substrate specificity and binding mode of available specific inhibitors are described in more detail. Finally, current and potential applications of inhibitors and ligands of GCPII for the diagnostics, imaging, and experimental therapy of neurodegenerative diseases and prostate cancer are discussed.