Neuropathy target esterase (NTE) is a neuronal membrane protein originally identified for its property to be modified by organophosphates (OPs), which in humans cause neuropathy characterized by axonal degeneration. Drosophila mutants for the homolog gene of NTE, swisscheese (sws), indicated a possible involvement of sws in the regulation of axon-glial cell interaction during glial wrapping. However, the role of NTE͞sws in mammalian brain pathophysiology remains unknown. To investigate NTE function in vivo, we used the cre͞loxP site-specific recombination strategy to generate mice with a specific deletion of NTE in neuronal tissues. Here we show that loss of NTE leads to prominent neuronal pathology in the hippocampus and thalamus and also defects in the cerebellum. Absence of NTE resulted in disruption of the endoplasmic reticulum, vacuolation of nerve cell bodies, and abnormal reticular aggregates. Thus, these results identify a physiological role for NTE in the nervous system and indicate that a loss-of-function mechanism may contribute to neurodegenerative diseases characterized by vacuolation and neuronal loss.cre͞lox P ͉ vacuolation ͉ thalamus ͉ hippocampus ͉ Purkinje cells N europathy target esterase (NTE) is a 150-kDa transmembrane protein that is highly conserved among species including insects, nematodes, yeast, and bacteria (1). Mutations in the Drosophila homolog, swisscheese (sws), produced glial-axonal hyperwrapping, degeneration, and a shortened life span (2). Both neurons and glia underwent cell death, accompanied by extensive vacuolation in the nervous system of Drosophila sws mutants. The NTE protein represents the mammalian homolog of the Drosophila swisscheese gene (3). The swisscheese and NTE proteins share a number of motifs including several hydrophobic transmembrane sequences, a serine esterase domain, and a sequence similar to the regulatory subunit of protein kinase A. A variety of pharmacological experiments have established the involvement of NTE in organophosphate (OP)-induced delayed neuropathy in humans and in animal models (3, 4), presumably through inactivation of the serine esterase activity. The protein NTE was initially identified as a target of OPs, found in pesticides and chemical warfare agents that cause peripheral neuropathy in humans (5, 6). OP-induced neuropathy has been implicated in Gulf War disease and other toxic neuropathies. However, the physiological functions of NTE, as well as the downstream events of NTE-induced neuropathy after OP exposure, remain unknown.We therefore sought to examine the physiological role of NTE in the central nervous system. Knockout of the NTE gene is embryonic lethal in mice at an early embryonic age (4, 19), thereby precluding the study of the role of NTE in the adult brain. We therefore constructed a conditional mutant NTE strain and deleted NTE specifically in neuronal tissues. We show here that neuron-specific deletion of NTE causes vacuolation of neuronal bodies and dendrites. The NTE protein was found to associate with the endopla...