Co-localization of GABA and nitric oxide synthase (NOS) has been investigated in neurones in the dorsolateral sector of the periaqueductal grey matter (PAG) in rats. GABA-immunoreactive neurones were found throughout the PAG although their density was greatest in the dorsolateral sector. Neurones containing nicotinamide adenine dinucleotide phosphate-dependent diaphorase, used to indicate NOS, were confined to the dorsolateral sector. GABA immunoreactivity was detected in 26.9% of 3009 diaphorase-reactive neurones counted at all rostro-caudal levels of the PAG in material from three rats. This double-labelled population may act as a neuronal gain control system which sets the level of excitability and responsiveness of effector systems in other sectors of the PAG.