The time course of cellular changes in the medial septum (MS) and vertical limb of the diagonal band area (VDB) after a complete unilateral fimbria-fornix (FF) transection has been studied using prelabeling of the septohippocampal neurons by bilateral hippocampal injections of the fluorescent retrograde tracer Fluoro-Gold (FG), in combination with acetylcholine esterase (AChE) histochemistry and nerve growth factor receptor (NGFr) immunocytochemistry. The results show that the long-term disappearance of AChE-positive and NGFr-positive cells represents a combination of down-regulation of the marker proteins, cell shrinkage, and an actual cell loss. By 4 weeks after lesion the loss of FG-prelabeled cells amounted to 50% in MS and 30% in VDB. A further 25-30% of the MS neurons survived (as indicated by the presence of FG label), but were undetectable by the AChE and NGFr markers. Down-regulation of the marker proteins and cell shrinkage preceded the cell loss by more than a week: while shrinkage and reduced numbers of AChE/NGFr positive cells was evident already by 4-7 days, an actual cell loss (i.e., loss of FG-prelabeled cells) became evident only at 4 weeks after lesion. Continuous intraventricular NGF infusion (0.15 micrograms/day) was capable of counteracting all three types of changes. Infusion over 2 weeks reversed both atrophy and loss of AChE/NGFr staining, whereas infusion over 4 weeks completely prevented the later occurring cell loss. In addition, the NGF infusions induced significant hypertrophy in the undamaged cholinergic neurons in both nucleus basalis and striatum. It is concluded that down-regulation of marker proteins, such as AChE and NGFr, and cellular atrophy precede cell death in the axotomized septohippocampal system and that about 1/3 of the axotomized septal cholinergic neurons may survive for a long time in a down-regulated atrophic state. Exogenous NGF can prevent both the atrophic and the degenerative processes.