We have examined the location of basal forebrain cells projecting to the region of the nuclei gemini in the caudolateral hypothalamus of the rat using retrograde transport of wheatgerm agglutinin-horseradish peroxidase. Since many tracer-positive neurons were identified in ventral pallidal areas known to project to the mediodorsal nucleus of the thalamus, we also prepared several animals with wheatgerm agglutinin-horseradish peroxidase injections in mediodorsal thalamus. Many of the sections from both groups of animals were subsequently prepared for the demonstration of ventral pallidal regions, using either substance P or glutamate decarboxylase as a pallidal marker. Some animals received injections of different retrogradely transported fluorescent tracers in the mediodorsal thalamus and the nuclei gemini for the purpose of studying potential axon collateralization. The large gemini-projecting cells are diffusely scattered within the medial forebrain bundle area, from the caudal margin of the nucleus of the horizontal limb of the diagonal band to the rostral tip of the olfactory tubercle, and with a concentration of cells in the lateral part of the medial forebrain bundle region. Gemini-projecting cells were not found in the olfactory tubercle proper, including the islands of Calleja complexes, or in the ventral pallidal areas located dorsal to the medial forebrain bundle area underneath the lateral extension of the anterior commissure. Gemini-projecting cells within ventral pallidal areas were observed only in regions where the longitudinal fascicles of the medial forebrain bundle interdigitate with the rostroventral extension of the ventral pallidum. Anterogradely-labeled fiber plexuses in the region of the nuclei gemini were observed following injection of Phaseolus vulgaris-leucoagglutinin or Fluoro-Ruby into the forebrain regions containing retrogradely-labeled neurons following nuclei gemini injections of wheatgerm agglutinin-horseradish peroxidase. We found no evidence of cells with axonal projections to both mediodorsal thalamus and nuclei gemini. The gemini-projecting cells are generally large, triangular and plump, and the electron microscopic picture of gemini-projecting neurons is the same regardless of whether the cells are located in pallidal or non-pallidal areas.