C. elegans aex-3 mutations cause pleiotropic behavioral defects that are suggestive of reduced synaptic transmission. aex-3 mutations also show strong genetic interactions with mutations in unc-31 and unc-64, two other genes implicated in synaptic transmission. Physiological and pharmacological studies indicate that aex-3 defects are presynaptic. In aex-3 mutants, the synaptic vesicle-associated RAB-3 protein aberrantly accumulates in neuronal cell bodies and is reduced in synapse-rich axons. This localization defect is specific to RAB-3, since other synaptic proteins are localized normally in aex-3 mutants. aex-3 encodes a 1409 amino acid protein with strong homology to DENN, a human protein of unknown function. In C. elegans, aex-3 is expressed in all or nearly all neurons. These results suggest that AEX-3 is a novel regulator of presynaptic activity that interacts with RAB-3 to regulate synaptic vesicle release.