Cholinergic and GABAergic neurons in the medial septum-diagonal band of Broca (MS-DB) project to the hippocampus where they are involved in generating theta rhythmicity. So far, the functional properties of neurochemically identified MS-DB neurons are not fully characterized. In this study, MS-DB neurons recorded in urethane anesthetized rats and in unanesthetized restrained rats were labeled with neurobiotin and processed for immunohistochemistry against glutamic acid decarboxylase (GAD), parvalbumin (PV), and choline acetyltransferase (ChAT). The majority of the 90 labeled neurons (75.5%) were GAD+. Among them, 34.0% were also PV+, but none were ChAT+. Only 8.8% of the labeled neurons were found ChAT+. Remaining neurons (15.5%) were not identified. In anesthetized rats, all of the PV/GAD+ and 65% of GAD+ neurons exhibited burst-firing activity at the theta frequency. PV/GAD+ neurons displayed higher discharge rate and longer burst duration compared with GAD+ neurons. At variance, all of the ChAT+ neurons were slow-firing. Cluster-firing and tonic-firing were observed in GAD+ and unidentified neurons. In unanesthetized rats, during wakefulness or rapid eye movement sleep with hippocampal theta, the bursting neurons were PV/GAD+ or GAD+, whereas all of the ChAT+ neurons were slow-firing. Across the sleep-wake cycle, the GABAergic component of the septohippocampal pathway was always more active than the cholinergic one. The fact that cholinergic MS-DB neurons do not display theta-related bursting or tonic activity but have a very low firing rate questions how acetylcholine exerts its activating role in the septohippocampal system.