A new fluorometric assay was developed for the measurement of gamma-glutamyl transpeptidase (gamma-GTP). The assay utilizes as a substrate the synthetic compound 7-gamma-glutamylamido-4-methyl coumarin which is cleaved by gamma-GTP to yield the highly fluorescent product 7-amino-4-methyl coumarin. Optimal excitation and emission wavelengths for the assay are 345 nm and 470 nm, respectively, and the sensitivity of the assay is greatly enhanced by the high-pressure liquid chromatographic separation of the product from the substrate. The assay is minimally 25 times more sensitive than the conventional spectrophotometric assay and permits analysis of as little as 5000 cultured cells of neuronal and glial origin. Analysis of a variety of cultured cells of neuronal and glial origin with this assay suggests that gamma-GTP is largely present in glia and to a lesser extent in neurons.