The characteristics of the islands of Calleja complex (ICC) in the basal forebrain of the rat were studied with immunohistochemistry, histofluorescence, acetylcholinesterase staining, India ink vascular perfusions, electron microscopy, and steroid autoradiography. The ICC contains clusters of granule cells and associated medium-sized and large cells in the surrounding neuropil of the olfactory tubercle and septum-nucleus accumbens interface. The ICCs were found to contain monoamine fibers (dopamine and norepinephrine), neuroactive peptide fibers (leu-enkephalin, met-enkephalin, substance P, cholecystokinin, luteinizing hormone-releasing hormone), acetylcholinesterase-containing somata and dendrites, and medium-sized and large cells that concentrate [3H] estradiol. The specific overlap and combination of putative neurotransmitters in separate compartments of the ICC suggest that these structures contain striatum- and pallidumlike components. Striatumlike regions are defined as the zone in the rim regions of the ICC and are innervated predominantly by dopamine and cholecystokinin inputs. Pallidumlike regions are defined as the synaptic zone near the medium-sized and large cells of the cap and core regions of the ICC and they are innervated predominantly by enkephalin, substance P, and gamma aminobutyric acid inputs. The morphology, connections, and neurotransmitter relationships of the ICC, therefore, resemble classical striatopallidal systems. The additional presence of substances involved in the reproductive neuroendocrine systems (luteinizing hormone-releasing hormone, estradiol-binding cells, especially in the medial ICC, suggest that some ICC are involved in an endocrine corticostriatopallidal system. These endocrine systems resemble other neocortically and allocortically originating corticostriatopallidal systems in terms of their cell types, connections, and neurotransmitter systems. A functional role for the ICC in extrapyramidal motor systems is proposed.