A monoclonal antibody to choline acetyltransferase (ChAT) was utilized for immunocytochemical identification of cholinergic neurons in the basolateral hypothalamus. Light and electron microscopic examination revealed a network of cell bodies, dendrites, and axonal processes dorsolateral to the supraoptic nucleus. Within this region the cells immunoreactive for ChAT receive numerous unlabeled terminals which contact dendrites, cell soma, axons and occasional somatic spines. In a few cases, small ChAT-immunoreactive terminals were observed contacting a cholinergic cell soma or large dendrite. Many ChAT-immunoreactive fibers were directed toward the supraoptic nucleus forming a dense local network but very few of these fibers penetrated deeper than approximately 20 micron into the supraoptic nucleus. A total of 63 ChAT-immunoreactive terminals were mapped within the basal hypothalamus, of which the vast majority contacted unlabeled dendrites immediately dorsolateral to the supraoptic nucleus. Labeled terminals were rare or nonexistent in the medial portions of the hypothalamus or deep within the supraoptic nucleus. This pattern of ChAT terminal densities correlates with the distribution of binding for the muscarinic cholinergic probe, [3H]quinuclidinylbenzilate, but not the binding of the putative nicotinic cholinergic probe, [125I]alpha-bungarotoxin, which is high within the supraoptic nucleus. Thus, the cholinergic neurons of the basal hypothalamus appear to form a network of intrinsic connections which probably represent input to muscarinic cholinergic receptors. No evidence was found to suggest that cholinergic presynaptic terminals were colocalized with the alpha-bungarotoxin binding protein within the supraoptic nucleus.