A sensitive method for acetylcholinesterase (AChE) histochemistry has been developed which permits simultaneous observation of fine fiber processes and neuron cell bodies. In rat brain, distinctive configurations can be observed which have been difficult to see by other techniques. The staining procedure involves two steps. Tissue sections are incubated first in Karnovsky and Roots medium diluted one-hundredfold; and then with a mixture containing diaminobenzidine (DAB) and H2O2. The reaction product of the first step induces cleavage of hydrogen peroxide in the second step, with a resulting oxidation of DAB to yield a fine precipitate. Addition of metal ions, such as nickel, to the DAB-H2O2 mixture produces high-contrast, Golgi-like images of neuron structures. The technique is much more sensitive than previous methods and greatly reduces background staining caused by crystallization of reaction products. Many potential applications exist for this new technique, in addition to the initial results described here.