Intracellular recordings were obtained from horizontal cells in the rabbit retina to assess the orientation sensitivity of their visual responses to moving and stationary rectangular slits of light. Cells were subsequently labeled with horseradish peroxidase (HRP) for morphological identification. The responses of A-type horizontal cells and those of the somatic and axon terminal endings of B-type horizontal cells (with the exception of one cell) were found to be insensitive to the orientation of light stimuli. However, 20 horizontal cells encountered within or just superior to the visual streak displayed clear orientation-sensitive response properties. These cells were divided into two groups: the majority (70%) showed preference for light stimuli oriented parallel to the visual streak, whereas the remainder preferred stimuli oriented orthogonal to the visual streak. Analysis of the shape of the receptive fields of these cells by means of a narrow, displaced slit of light revealed an anisotropy with the major or elongated axis of the receptive field of each cell aligned along the same angle as its physiological preferred orientation. Morphologically, the orientation-sensitive horizontal cells formed a homogeneous group with an architecture corresponding to that of elongated A-type or Ae-type horizontal cells reported previously in the rabbit retina. These cells showed a marked elongation of their dendritic arbors with the major axes oriented either parallel or orthogonal to the visual streak. Furthermore, the orientation of the dendritic arbor of each cell matched that of its physiological preferred orientation. The present results, then, suggest strongly that the orientation sensitivity of Ae-type horizontal cells results directly from the asymmetry in their dendritic arbors. The spatial location and specialized physiology of Ae-type horizontal cells suggest that they play a role in the formation of orientation-sensitive properties exhibited by more proximal neurons in the rabbit retina.