In recent years, GABAergic neurons have been identified in the basal forebrain where cholinergic cortically projecting neurons are located and known to be important in mechanisms of cortical activation. In the present study in the rat, the relationship of the GABA-synthesizing neurons to the acetylcholine-synthesizing neurons was examined by application of a sequential double staining immunohistochemical procedure involving the peroxidase-antiperoxidase technique for glutamic acid decarboxylase (GAD) and choline acetyltransferase (ChAT). In these double and adjacent single immunostained series of sections, the GAD+ and ChAT+ cells were mapped, counted and measured with the aid of a computerized image analysis system. Through the entire basal forebrain, there was no evidence for colocalization of GAD and ChAT in the same neurons. Instead, a large population of GAD-immunoreactive neurons is codistributed with ChAT-immunoreactive neurons and outnumbers them by a factor of two: approximately 39,000 GAD+ cells to 18,000 ChAT+ cells. Although the GAD+ and ChAT+ neurons lie intermingled within fascicles of the major longitudinal and transverse forebrain fiber systems in subregions of the basal forebrain, the GAD+ cells are more highly concentrated within different sectors of the pathways and regions than the ChAT+ cells. Although GAD+ neurons resemble ChAT+ neurons in certain regions, both being bi- or multipolar and, on average, medium-sized cells, the GAD+ neurons are, in the majority (51%), small-sized cells (< 15 microns in length) and as a population significantly smaller than the ChAT+ neurons. These results suggest that many GABAergic neurons may represent interneurons in the basal forebrain and potentially exert an inhibitory influence on adjacent cortically projecting cholinergic neurons. Medium- to large GAD+ cells, which resemble similar ChAT+ cells, are also present and represent the majority of the GAD+ cells in the nucleus of the diagonal band of Broca, magnocellular preoptic nucleus, and olfactory tubercle, but represent the minority in the anterior and posterior substantia innominata and globus pallidus. Given their prominent size, such GABAergic cells may also exert an inhibitory influence outside the basal forebrain as projection neurons and potentially in parallel with cholinergic neurons, to certain regions of the cerebral cortex. Accordingly, GABAergic cells may be considered as constituents of the magnocellular basal nucleus and potentially important elements within the ventral extrathalamic relay from the brainstem reticular formation to the cerebral cortex.