The UNC-13 protein family has been suggested to be critical for synaptic vesicle dynamics based on its interactions with Syntaxin, Munc-18 and Doc 2alpha. We cloned the Drosophila homolog (Dunc-13) and characterized its function using a combination of electrophysiology and ultrastructural analyses. Dunc-13 contained a C1 lipid-binding motif and two C2 calcium-binding domains, and its expression was restricted to neurons. Elimination of dunc-13 expression abolished synaptic transmission, an effect comparable only to removal of the core complex proteins Syntaxin and Synaptobrevin. Transmitter release remained impaired under elevated calcium influx or application of hyperosmotic saline. Ultrastructurally, mutant terminals accumulated docked vesicles at presynaptic release sites. We conclude that Dunc-13 is essential for a stage of neurotransmission following vesicle docking and before fusion.