Nuclear changes, including internucleosomal DNA fragmentation, are characteristic features of neuronal apoptosis resulting from transient cerebral ischemia and related brain insults for which the molecular mechanism has not been elucidated. Recent studies suggest that a caspase-3-mediated mechanism may be involved in the process of nuclear degradation in ischemic neurons. In this study, we cloned from rat brain a homolog cDNA encoding caspase-activated deoxyribonuclease (CAD)/DNA fragmentation factor 40 (DFF40), a 40 kDa nuclear enzyme that is activated by caspase-3 and promotes apoptotic DNA degradation. Subsequently, we investigated the role of CAD/DFF40 in the induction of internucleosomal DNA fragmentation in the hippocampus in a rat model of transient global ischemia and in primary neuronal cultures under ischemia-like conditions. At 8-72 hr after ischemia, CAD/DFF40 mRNA and protein were induced in the degenerating hippocampal CA1 neurons. CAD/DFF40 formed a heterodimeric complex in the nucleus with its natural inhibitor CAD (ICAD) and was activated after ischemia in a delayed manner (>24 hr) by caspase-3, which translocated into the nucleus and cleaved ICAD. Furthermore, an induced CAD/DFF40 activity was detected in nuclear extracts in both in vivo and in vitro models, and the DNA degradation activity of CAD/DFF40 was inhibited by purified ICAD protein. These results strongly suggest that CAD/DFF40 is the endogenous endonuclease that mediates caspase-3-dependent internucleosomal DNA degradation and related nuclear alterations in ischemic neurons.