We have cloned a peptide transporter from rat brain and found it to be identical to rat kidney PEPT2. In the present study we characterize the transport function of the rat brain PEPT2, with special emphasis on electrophysiological properties and interaction with N-acetyl-L-aspartyl-L-glutamate (NAAG). When heterologously expressed in HeLa cells and in SK-N-SH cells, PEPT2 transports several dipeptides but not free amino acids in the presence of a proton gradient. NAAG competes with other peptides for the PEPT2-mediated transport process. When PEPT2 is expressed in Xenopus laevis oocytes, substrate-induced inward currents are detectable with dipeptides of differing charge in the presence of a proton gradient. Proton activation kinetics are similar for differently charged peptides. NAAG is a transportable substrate for PEPT2, as evidenced by NAAG-induced currents. The Hill coefficient for protons for the activation of the transport of differently charged peptides, including NAAG, is 1. Although the peptide-to-proton stoichiometry for negatively charged peptides is 1, the transport nonetheless is associated with transfer of positive charge into the oocyte, as indicated by peptide-induced inward currents.