Angiotensin converting enzyme was localized in rat brain by quantitative in vitro autoradiography using an [125I]labelled converting enzyme inhibitor called "351A". This radioligand was found to bind with high affinity and specificity to angiotensin converting enzyme. Very high levels of converting enzyme were observed in the ventricular choroid plexus, ependyma of all ventricles and large and medium blood vessels, subfornical organ and organum vasculosum of the lamina terminalis. High levels of converting enzyme were found in the basal ganglia including caudate putamen, nucleus accumbens, globus pallidus, entopenduncular nucleus and substantia nigra pars reticulata. The neurosecretory nuclei, paraventricular nucleus and supraoptic nucleus, as well as the median eminence and posterior pituitary displayed high levels of the enzyme. In the amygdala, basolateral, lateral, basomedial, medial and anterior cortical nuclei showed moderate converting enzyme activity. The medial habenula and molecular layer of the dentate gyrus showed high levels of activity. In the cerebellum, dense labelling was observed in the Purkinje cell layer. Moderate levels of convering enzyme occurred in the gelatinosus subnucleus of the caudal part of the nucleus of the spinal tract of the trigeminal. There was a close correspondence between the distribution of angiotensin converting enzyme and angiotensin II in the neurosecretory nuclei (paraventricular and supraoptic nuclei) and median eminence and this suggests a role of angiotensin converting enzyme in the production of angiotensin II in this system. There was also a good correspondence between the distribution of angiotensin converting enzyme and angiotensin II in the subfornical organ, median preoptic nucleus and organum vasculosum of the lamina terminalis, structures abutting the anterior wall of the third ventricle which are implicated in fluid and electrolyte homeostasis. A striking discrepancy occurs in the basal ganglia which is reported to contain very little angiotensin II or angiotensin II receptors but is very rich in angiotensin converting enzyme. It is concluded that the enzyme may act to 1. (a) convert circulating angiotensin I to angiotensin II in circumventricular organs; 2. (b) generate intraneuronal angiotensin II in pathways such as the hypothalamichypophyseal tract; and 3. (c) process neuropeptides other than angiotensin II in regions such as basal ganglia.