It is now well recognized that there are several groups of cholinergic neurons in the basal forebrain with direct projections to various cortical regions. Immunohistochemical investigations of the distribution of the neuropeptide galanin (GAL) have shown that two of these brain areas, the medial septum and diagonal band, contained large numbers of GAL-immunoreactive neurons. In the present study, double staining techniques using antibodies raised against choline acetyltransferase (ChAT) revealed that GAL- and ChAT-like immunoreactivities are colocalized within a subpopulation of the cholinergic neurons within the medial septum and diagonal band. This colocalization of GAL- and ChAT-immunoreactivities was not seen to occur within other groups of forebrain cholinergic neurons. Immunohistochemistry carried out subsequent to injections of fluorescent retrograde tracers into the hippocampal formation revealed that both ChAT/GAL- and ChAT-containing neurons project to the hippocampal formation. The question of GAL as a modulator of cholinergic transmission in this projection is discussed.