Immunocytochemical techniques have been used to identify a striking interneuronal population which is immunoreactive for the peptide, somatostatin. The cell population, which is seen most densely in stratum oriens and at the oriens/alveus border of the CA1 region of rabbit hippocampus, was characterized in light and electron microscopic observations. The cells have dendrites which extend parallel to and into the alveus, with occasional processes ascending through stratum pyramidale toward the hippocampal fissure. The dendrites receive numerous synaptic contacts directly onto aspinous dendritic shafts. Axon collaterals ramify profusely within the pyramidale region, and among the proximal apical and basal pyramidal cell dendrites in areas of stratum radiatum and stratum oriens. Somatostatin-like immunoreactive terminals make synaptic contact, primarily of the symmetric type, with the somata and proximal dendrites of pyramidal neurons. Somatostatin-like neurons are found at approximately equal density in the hippocampus of immature (8 days postnatal) and mature (30 days postnatal) rabbit. Double-labelling techniques, to identify both somatostatin-like and glutamic acid decarboxylase (GAD) immunoreactive neurons, demonstrated that a large proportion of the somatostatin neurons were also GABAergic.