The present study was undertaken to determine the frequency and distribution of GABAergic neurons within the rat pontomesencephalic tegmentum and the relationship of GABAergic cells to cholinergic and other tegmental neurons projecting to the hypothalamus. In sections immunostained for glutamic acid decarboxylase (GAD), large numbers of small GAD-positive neurons (approximately 50,000 cells) were distributed through the tegmentum and associated with a high density of GAD-positive varicosities surrounding both GAD-positive and GAD-negative cells. Through the reticular formation, ventral tegmentum, raphe nuclei, and dorsal tegmentum, GAD-positive cells were codistributed with larger cells, which included neurons immunostained on adjacent sections for glutamate, tyrosine hydroxylase (TH), serotonin, or choline acetyltransferase (ChAT). In sections dual-immunostained for GAD and ChAT, GABAergic neurons were seen to be intermingled with less numerous cholinergic cells (approximately 2,600 GAD+ to approximately 1,400 ChAT+ cells in the laterodorsal tegmental nucleus, LDTg). Retrograde transport of cholera toxin (CT) was examined from the posterior lateral hypothalamus, where a major population of cortically projecting neurons are located. A small number of GABAergic cells were retrogradely labeled, representing a small percentage of all the GABAergic neurons (approximately 1%) and of all the hypothalamically projecting neurons (approximately 6%) in the tegmentum. The double-labeled GAD+/CT+ cells were commonly found ipsilaterally within 1) the deep mesencephalic reticular field, codistributed with putative glutamatergic projection neurons; 2) the ventral tegmental area, substantia nigra compacta, and retrorubral field, codistributed with dopaminergic projection neurons; 3) dorsal raphe, codistributed with serotonergic projection neurons; and 4) laterodorsal and pedunculopontine tegmental nuclei, codistributed with and in similar proportion to cholinergic projection cells (20-30% in LDTg). Acting as both projection and local neurons, the pontomesencephalic GABAergic cells would have the capacity to modulate the influence of the "ascending reticular activating system" and its chemically specific constituents upon cortical activation.