The distribution and ultrastructural localization of acetylcholinesterase (AChE) was examined in the substantia nigra of rat and guinea pig. Although the pars compacta, in both species, is clearly defined when stained with thionin, there is an apparent discrepancy in the distribution of AChE at the light microscope level. In the rat substantia nigra the enzyme appears to be concentrated mainly in the pars compacta, whereas in the guinea pig the AChE seems homogeneous throughout the entire substantia nigra. Ultrastructural studies, however, reveal a close correspondence in the morphology of rat and guinea pig substantia nigra. The subcellular localization of AChE is also similar. The between-species discrepancy seen with the light microscope was attributed to relative differences in level of intensity of staining for AChE. In both rat and guinea pig, the enzyme is localized in two types of neuron and in the extracellular space. The ultrastructural distribution of AChE is discussed with reference to neurochemical studies on its release from nigral neurons.