Regulatory peptides, including neuropeptides, are metabolized by membrane-bound peptidases. We have localized the membrane peptidases angiotensin-converting enzyme (ACE), dipeptidyl peptidase IV (DPPIV), and aminopeptidase M (APM) in normal and inflamed human synovium by immunohistochemistry and enzyme histochemistry. ACE was localized to endothelial cells of all vessels, whereas endothelial DPPIV and APM were restricted to veins and capillaries of some cases. Perivascular spindle-shaped cells stained positively for APM, but rarely for ACE and DPPIV. Synovial lining cells were universally positive for APM but rarely for ACE or DPPIV, whereas a subintimal layer of spindle-shaped cells was frequently positive for all three enzymes, particularly APM. Staining for each enzyme was also observed on some stromal cells. Inflamed synovium displayed increased cellularity with corresponding increases in membrane peptidase staining. APM-positive, perivascular spindle-shaped cells and DPPIV-positive lymphocytes frequently bore HLA class II antigens. This distribution of membrane peptidases supports the hypothesis of a functional compartmentalization of vascular peptidergic systems, with the activities of vasoactive peptides localized to their sites of release. Furthermore, metabolic pathways for regulatory peptides may vary between different structures within human synovium, and these enzymes may be of different relative importance in normal and inflamed tissues. The implied regional control of regulatory peptide activity by membrane peptidases suggests novel potential approaches to the pharmacological manipulation of inflammation by specific enzyme inhibitors.