We have recently reported on a novel mode of modulation of neuronal transmission at the glutamatergic junction. This signaling pathway involves lysophosphatidic acid (LPA) acting via presynaptic LPA2 receptors. This is in turn controlled by a molecule which we named plasticity related gene-1 (PRG-1, Bräuer et al., Nat Neurosci 2003) from the postsynaptic side (Trimbuch et al., Cell 2009). PRG-1 is a brain-specific membrane protein related to lipid phosphate phosphatases (LPPs) with a selective expression in neurons (Geist et al., CMLS 2011). We detected an important role of LPA-synthesizing pathways in bioactive signaling at the synapse acting via ATX and etablished nano-particles as LPA-biosensor using the characteristic spectral shift allowing detection in 2-photon imaging. We provide insights into the oligomeric assembly of PRG-1 in the membrane and assessed LPA-binding, uptake and intracellular interaction partners of the molecule. Animals lacking one PRG-1 allele exhibit a broad spectrum of behavioral pathology indicative of altered brain network function and psychiatric disorders. These changes are already present in animals lacking only 50% of PRG-1. A point mutation at R345T which appears to result in loss-of-function when re-expressed in the mouse was found in 5925 healthy individuals with a heterozygous frequency of approximately 0.86% (about 4.500.000 European citizens). Individuals carrying this loss-of-function mutation revealed functional alterations of sensory gating involved in psychiatric disorders. We plan to continue our studies on (1) synthesis and action of LPA, (2) molecular function of PRG-1 in bioactive lipid signaling, and (3) the role of PRG-1 signaling in brain network function and psychiatric disorders. Characterization of the molecular basis of this novel modulatory signaling pathway and its role in brain network function will be important for our understanding of its role in health and disease.