Deacetylation is a rapid clearance mechanism for ocular melatonin. We have studied the distribution of retinal melatonin deacetylase activity among vertebrate classes. Exogenous radiolabeled melatonin is metabolized by ocular tissue prepared from the amphibian Xenopus laevis, the reptile Anolis carolinensis, the teleost fish Carassius auratus, and the bird Gallus domesticus. In contrast, we were unable to detect ocular melatonin breakdown in rat or pig. In each species exhibiting ocular melatonin breakdown, melatonin is first deacetylated to 5-methoxytryptamine, which is deaminated, producing 5-methoxyindoleacetic acid and 5-methoxytryptophol. Deacetylation of melatonin is inhibited by eserine (physostigmine), causing a reduction in the levels of all 3 metabolites. Deamination of 5-methoxytryptamine is inhibited by the monoamine oxidase inhibitor pargyline, such that 5-methoxyindoleacetic acid and 5-methoxytryptophol levels are decreased while levels of 5-methoxytryptamine are increased. Incubation with the deacetylase inhibitor eserine increases endogenous melatonin levels in Xenopus and Carassius eyecups, indicating that endogenous melatonin is metabolized via the deacetylase. We also studied the tissue distribution of the deacetylase in Xenopus laevis. Melatonin deacetylation occurs in retina, retinal pigment epithelium, and skin, all of which are sites of melatonin action. These results indicate that among non-mammalian vertebrates, deacetylation is a common clearance mechanism for ocular melatonin, and may degrade melatonin at other sites of action as well. Melatonin deacetylation may help regulate local melatonin concentration, and generates other biologically active methoxyindoles.