Carboxypeptidase E (CPE, enkephalin convertase, carboxypeptidase H; EC 3.4.17.10) is a carboxypeptidase B-like enzyme proposed to be involved in the synthesis of a variety of peptide hormones and neurotransmitters. In the present study we have localized CPE in the rat central nervous system using specific polyclonal antisera to the purified enzyme. Immunoreactive CPE occurs in a variety of cell somas and neuronal terminals in the central nervous system. The enzyme is most concentrated in the hypothalamus, especially in the median eminence, supraoptic nucleus, paraventricular nucleus, and suprachiasmatic nucleus. CPE is also found in axon terminals in the posterior pituitary gland, melanotropes of the intermediate pituitary gland, and select cells of the anterior pituitary gland. Immunoreactivity to CPE in the hippocampus is found in the pyramidal cells and in the inner part of the molecular layer of the dentate gyrus. CPE is also found in the central nucleus of the amygdala and the bed nucleus of the stria terminalis. These results suggest that CPE distribution corresponds to that of many neuropeptides at the fine structural level, thus further implicating CPE in peptide processing.