N-methyl-D-aspartate receptors (NMDARs) subserve numerous neurophysiological and neuropathological processes in the cerebral cortex. Their activation requires the binding of glutamate and also of a coagonist. Whereas glycine and D-serine (D-ser) are candidates for such a role at central synapses, the nature of the coagonist in cerebral cortex remains unknown. We first show that the glycine-binding site of NMDARs is not saturated in acute slices preparations of medial prefrontal cortex (mPFC). Using enzymes that selectively degrade either D-ser or glycine, we demonstrate that under the present conditions, D-ser is the principle endogenous coagonist of synaptic NMDARs at mature excitatory synapses in layers V/VI of mPFC where it is essential for long-term potentiation (LTP) induction. Furthermore, blocking the activity of glia with the metabolic inhibitor, fluoroacetate, impairs NMDAR-mediated synaptic transmission and prevents LTP induction by reducing the extracellular levels of D-serine. Such deficits can be restored by exogenous D-ser, indicating that the D-amino acid mainly originates from glia in the mPFC, as further confirmed by double-immunostaining studies for D-ser and anti-glial fibrillary acidic protein. Our findings suggest that D-ser modulates neuronal networks in the cerebral cortex by gating the activity of NMDARs and that altering its levels is relevant to the induction and potentially treatment of psychiatric and neurological disorders.