Mammalian brain contains high levels of d-serine, an endogenous co-agonist of N-methyl D-aspartate type of glutamate receptors. D-Serine is synthesized by serine racemase, a brain enriched enzyme converting L- to D-serine. Degradation of D-serine is achieved by D-amino acid oxidase, but this enzyme is not present in forebrain areas that are highly enriched in D-serine. We now report that serine racemase catalyzes the degradation of cellular D-serine itself, through the alpha,beta-elimination of water. The enzyme also catalyzes water alpha,beta-elimination with L-serine and L-threonine. alpha,beta-Elimination with these substrates is observed both in vitro and in vivo. To investigate further the role of alpha,beta-elimination in regulating cellular D-serine, we generated a serine racemase mutant displaying selective impairment of alpha,beta-elimination activity (Q155D). Levels of D-serine synthesized by the Q155D mutant are several-fold higher than the wild-type both in vitro and in vivo. This suggests that the alpha,beta-elimination reaction limits the achievable D-serine concentration in vivo. Additional mutants in vicinal residues (H152S, P153S, and N154F) similarly altered the partition between the alpha,beta-elimination and racemization reactions. alpha,beta-Elimination also competes with the reverse serine racemase reaction in vivo. Although the formation of L- from D-serine is readily detected in Q155D mutant-expressing cells incubated with physiological D-serine concentrations, reversal with wild-type serine racemase-expressing cells required much higher D-serine concentration. We propose that alpha,beta-elimination provides a novel mechanism for regulating intracellular D-serine levels, especially in brain areas that do not possess D-amino acid oxidase activity. Extracellular D-serine is more stable toward alpha,beta-elimination, likely due to physical separation from serine racemase and its elimination activity.