The termination pattern of septohippocampal axons visualized by anterograde transport of Phaseolus vulgaris leucoagglutinin was studied in the hippocampal formation in the rat, with special reference to the innervation of neurons immunoreactive for the neuroactive peptides cholecystokinin, somatostatin or vasoactive intestinal polypeptide. The type I, GABAergic, septohippocampal afferents were shown to terminate on neurons immunoreactive for each of the three peptides. The cholecystokinin-like immunoreactive neurons in all regions, and the somatostatin-immunoreactive cells in stratum oriens of CA1 region were the most preferred targets. Cholecystokinin-immunoreactive cells, especially those in the granule cell layer of the dentate gyrus, were often seen to be contacted by type II (presumed cholinergic) axons as well. The somatostatin-immunoreactive cells in the hilus were also innervated by type I septohippocampal axons, although less frequently than those in stratum oriens of the CA1 subfield. Each type of peptidergic neuron received multiple symmetrical synaptic input from the Phaseolus vulgaris leucoagglutinin-labelled septal afferents, as confirmed by correlated electron microscopy. The majority of these neuropeptide-containing cells are known to be GABAergic, and to have distinct input and output relationships. Thus, the present results demonstrate that the GABAergic septohippocampal pathway can control a wide range of putative inhibitory circuits, and thereby influence the pattern of electrical activity in the hippocampal formation.