Extracellular unit recordings were obtained from neurons in the ventral tegmental area (VTA), the substantia nigra, zona compacta (SNC) and zone reticulata (SNR) of adult female albino rats anaesthetized with urethane and chloral hydrate. Neurons were divided into two types based on their electrophysiological characteristics; Type I neurons had long duration action potentials (greater than 2.6 msec) and slow discharge rates and Type II neurons had shorter duration action potentials and a wider range of discharge rates. Both types of neurons were found in the VTA and SNC, but there were only Type II neurons in the SNR. The effects of single pulse stimuli delivered to the ipsilateral ventromedial (VMH) or lateral (LH) hypothalamic areas on activities of the two types of neurons were investigated. Only a small portion of neurons in the VTA and SNC responded to VMH stimulation, but in contrast a majority of the two types of neurons in the VTA and SNC responded to LH stimulation. Most neurons in the SNR did not respond to VMH and LH stimulation. Type iI neurons in the VTA and SNC were predominantly suppressed by LH stimulation with short onset latencies (less than 6 msec), indicating the possibility of monosynaptic mediation. However Type I neurons in the VTA and SNC were activated and suppressed and the onset latencies of these responses were relatively longer. The high proportion of neurons of VTA and SNC responding to electrical stimulation of LH is consistent with anatomical evidence. Suppression and activation of Type I neurons in VTA and SNC suggest that the LH exerts modulatory influences on these neurons of the midbrain.