The synaptic organization of septal inputs to the rat habenular complex of the dorsal diencephalon was examined employing the anterograde tracer wheat germ agglutinin conjugated to horseradish peroxidase (WGA-HRP). The cellular distribution of substance P (SP) and choline acetyltransferase (ChAT) immunoreactivity was also studied at the light and electron microscopic level. Following placements of tracer within the entire septum, labeled axons were observed in the stria medullaris and in the medial and lateral subnuclei of the habenula. Following injections of tracer in the nuclei triangularis and septofimbrialis of the posterior septum, the medial subnucleus was heavily labeled, whereas the lateral subnucleus was devoid of peroxidase activity. The medial subnucleus possessed labeled myelinated axons and terminals that contained clear, spherical vesicles and formed asymmetric contacts with dendritic spines and shafts. Terminals possessing WGA-HRP activity also formed non-synaptic junctions with other labeled or unlabeled terminals. SP and ChAT immunoreactivity in normal and colchicine-treated animals was confined to dendrites and somata within the medial habenula. Terminals containing clear spherical vesicles formed asymmetric synaptic contacts with these immunoreactive somatic and dendritic profiles. Based on the combined anterograde tracing and immunohistochemical data, it is proposed that septal projections provide a direct innervation to habenular neurons that contain ChAT or SP activity. These septal inputs may play an important role in the facilitation of the ChAT- and SP-positive habenular neurons, both of which provide prominent afferent inputs to the interpeduncular nucleus. Thus, neurons of the habenula and interpeduncular nucleus are under the direct and indirect influence of septal neurons within the limbic forebrain circuit.