Calcium-activated neutral proteinase (CANP) activity was determined in subcellular fractions and in different regions of bovine brain. The CANP specific activity in spinal cord and corpus callosum, areas rich in myelin, were almost six-fold greater than cerebral cortex and cerebellum. Treatment of whole homogenate and myelin with 0.1% Triton X-100 increased the CANP activity by tenfold. Subcellular fractions were prepared from bovine brain gray and white matter. Most of the CANP activity (70%) was in the primary particulate fractions P1 (nuclear), P2 (mitochondrial) and P3 (microsomal). On subfractionation of each particulate fraction, the majority of the activity (greater than 50%) was recovered in the myelin-enriched fractions (P1A, P2A, P3A) which separate at the interphase of 0.32 M- and 0.85 M-sucrose. The distribution of activity was P2A greater than P1A greater than P3A. Further purification of myelin (of P2A) increased the specific activity over homogenate by more than three-fold. The same myelin fractions contained the highest proportion (60%) and specific activity (five-fold increase) of CNPase. The enzyme activity in different regions of brain and in subcellular fractions was increased by 20-39% after the inhibitor was removed. Electron microscopic study confirmed that the myelin fractions were highly purified. The cytosolic fraction contained 20-30% of the total homogenate CANP activity. Other fractions contained low enzyme activity. CANP was identified in the purified myelin fraction by electroimmublot-technique. It is concluded that the bulk of CANP in CNS is tightly bound to the membrane, may be masked or hidden and is intimately associated with the myelin sheath.