Cholinergic medial septal neurons may regulate several aspects of hippocampal function, including place field stability and spatial working memory. Monkeys with damage to septal cholinergic neurons are impaired in visual-spatial conditional learning tasks; however, this candidate function of septal cholinergic neurons has not been studied extensively in the rat. In the present study, rats with selective lesions of cholinergic neurons in the medial septum and vertical limb of the diagonal band of Broca (MS/VDB), made with 192 IgG-saporin, were tested on a conditional associative learning task. In this task, which we term "environment-spatial" conditional learning, the correct location of a spatial response depended on the array of local environmental cues. MS/VDB-lesioned rats were impaired when the two parts of the conditional problem were presented concurrently, but not when one environment had been learned before the full conditional problem was presented. Our findings suggest that cholinergic MS/VDB neurons participate in some aspects of conditional associative learning in rats. They may also shed light on the involvement of cholinergic projections to the hippocampus in modulating and remodeling hippocampal spatial representations.