The cholinergic inputs to the rat hippocampus were lesioned by intraseptal injections of 192 IgG-saporin. After 15 days, fetal septal cells were grafted into the hippocampus. Thirteen months later, hippocampal acetylcholine (ACh) release was studied by microdialysis. Lesioning reduced basal ACh release (100%) to 20% of normal, which was compensated for by the graft (71%). Infusion of the serotonin uptake inhibitor citalopram (100 microM) enhanced ACh release to the same extent (% of basal release) in all rat groups. Systemic injection of 8-OH-DPAT (0.5 mg/kg, SC), an agonist of 5-HT1A receptors, caused a smaller ACh release than citalopram. Acetylcholinesterase (AChE) staining and densitometric quantification revealed that the lesion-induced reduction of the AChE-staining density was compensated for by septal grafting. In conclusion, both histochemical and biochemical methods showed that cholinergic hippocampal parameters were drastically impaired by 192 IgG-saporin lesions, but were almost completely restored by septal grafting. The graft responded to intrinsic serotonergic regulation.