In mammalian brain, D-serine is synthesized from L-serine by serine racemase, and it functions as an obligatory co-agonist at the glycine modulatory site of N-methyl-D-aspartate (NMDA)-selective glutamate receptors. Although diminution in D-serine level has been implicated in NMDA receptor hypofunction, which is thought to occur in schizophrenia, the source of the precursor L-serine and its role in D-serine metabolism in adult brain have yet to be determined. We investigated whether L-serine synthesized in brain via the phosphorylated pathway is essential for D-serine synthesis by generating mice with a conditional deletion of D-3-phosphoglycerate dehydrogenase (Phgdh; EC 1.1.1.95). This enzyme catalyzes the first step in L-serine synthesis via the phosphorylated pathway. HPLC analysis of serine enantiomers demonstrated that both L- and D-serine levels were markedly decreased in the cerebral cortex and hippocampus of conditional knock-out mice, whereas the serine deficiency did not alter protein expression levels of serine racemase and NMDA receptor subunits in these regions. The present study provides definitive proof that L-serine-synthesized endogenously via the phosphorylated pathway is a key rate-limiting factor for maintaining steady-state levels of D-serine in adult brain. Furthermore, NMDA-evoked transcription of Arc, an immediate early gene, was diminished in the hippocampus of conditional knock-out mice. Thus, this study demonstrates that in mature neuronal circuits L-serine availability determines the rate of D-serine synthesis in the forebrain and controls NMDA receptor function at least in the hippocampus.