Because of their strategic position between the granule cell and pyramidal cell layers, neurons of the hilar region of the hippocampal formation are likely to play an important role in the information processing between the entorhinal cortex and the hippocampus proper. Here we present an electrophysiological characterization of anatomically identified neurons in the fascia dentata as studied using patch-pipette recordings and subsequent biocytin-staining of neurons in slices. The resting potential, input resistance (RN), membrane time constant (taum), "sag" in hyperpolarizing responses, maximum firing rate during a 1-s current pulse, spike width, and fast and slow afterhyperpolarizations (AHPs) were determined for several different types of hilar neurons. Basket cells had a dense axonal plexus almost exclusively within the granule cell layer and were distinguishable by their low RN, short taum, lack of sag, and rapid firing rates. Dentate granule cells also lacked sag and were identifiable by their higher RN, longer taum, and lower firing rates than basket cells. Mossy cells had extensive axon collaterals within the hilus and a few long-range collaterals to the inner molecular layer and CA3c and were characterized physiologically by small fast and slow AHPs. Spiny and aspiny hilar interneurons projected primarily either to the inner or outer segment of the molecular layer and had a dense intrahilar axonal plexus, terminating onto somata within the hilus and CA3c. Physiologically, spiny hilar interneurons generally had higher RN values than mossy cells and a smaller slow AHP than aspiny interneurons. The specialized physiological properties of different classes of hilar neurons are likely to be important determinants of their functional operation within the hippocampal circuitry.