The role of septohippocampal circuits in the generation of the P300 response in cats (n = 12) was explored in a series of depth recording, tract-tracing and lesion experiments. Systematic mapping of the hippocampus in 1-mm increments from rostral to caudal extent revealed large positive potentials, greater in amplitude to rare than to frequent stimuli, within the 200-500 ms range. Each map revealed maximal amplitude responses at diverse, widely distributed hippocampus loci. Furthermore, these electrical responses displayed polarity inversion within the hippocampus that was generally localized to the pyramidal cell layer; polarity inversion was also observed in the adjacent entorhinal cortex and amygdala. Injections of propidium iodide, a tract-tracing agent, into these inversion sites resulted in retrograde labeling of small clusters of choline acetyltransferase (ChAT)-positive neurons in the medial septal nucleus and vertical limb of the diagonal band. Aspiration lesions that bilaterally destroyed large amounts of caudal hippocampus from stereotaxic levels A4 to A1 resulted in a decreased number of cells expressing ChAT in the rostral basal nuclear complex. In only 2 cats was the preoperative presence of a significant vertex P300 absent postoperatively. In the majority of cases (5 of 8 animals), hippocampal aspiration produced an enhancement of the preoperative P300 potential. We conclude that cholinergic mechanisms are importantly, albeit not exclusively, involved in the mediation of P300 potentials in cats. Neurons mediating P300 responses appear to be organized in diverse clusters of septal and diagonal band cells. These septal cells may facilitate, and in turn be facilitated or inhibited as a function of hippocampal, or other, allocortical feedback loops.