GABAergic neurons are coextensive with cholinergic neurons in the medial septum-diagonal band complex. Serial sectioning, sequential staining and double immunofluorescence techniques employing antibodies to glutamate decarboxylase and choline acetyltransferase revealed the distribution of these transmitter-specific neurons in the rat. Morphologically, the two types of neurons appear similar, in that they are predominantly large multipolar cells, but they are characterized by different, overlapping distributions in the diagonal band. Glutamate decarboxylase-positive cells are scattered throughout the nucleus of the vertical limb of the diagonal band, while choline acetyltransferase-positive neurons are more numerous medially and are distributed in groups corresponding to the dorsal and ventral aspects of the nucleus. In the rostral parts of the nucleus of the horizontal limb of the diagonal band, the choline acetyltransferase-positive cells tend to be located medially, whereas caudally they spread dorsal to the nucleus to become continuous with other large cholinergic neurons in the ventral pallidum and sublenticular substantia innominata. The large majority of glutamate decarboxylase-positive neurons remain in a more ventral and lateral position within the nucleus of the horizontal limb and are particularly numerous just lateral to the diagonal band fibers as they join the medial forebrain bundle. Cholinergic neurons were estimated to be about two times more numerous than GABAergic neurons. Approximately 1% of the choline acetyltransferase-positive neurons were also glutamate decarboxylase-positive in double immunofluorescence studies, but not in sequentially stained or serial sections.