A high density of galanin binding sites was found by using 125I-labeled galanin, iodinated by chloramine-T, followed by autoradiography in the ventral, but not in the dorsal, hippocampus of the rat. Lesions of the fimbria and of the septum caused disappearance of a major population of these binding sites, suggesting that a large proportion of them is localized on cholinergic nerve terminals of septal afferents. As a functional correlate to these putative galanin receptor sites, it was shown, both in vivo and in vitro, that galanin, in a concentration-dependent manner, inhibited the evoked release of acetylcholine in the ventral, but not in the dorsal, hippocampus. Intracerebroventricularly applied galanin (10 micrograms/15 microliters) fully inhibited the scopolamine (0.5 mg/kg, s.c.)-stimulated release of acetylcholine in the ventral, but not in the dorsal, hippocampus, as measured by microdialysis technique. In vitro, galanin inhibited the 25 mM K+-evoked release of [3H]acetylcholine from slices of the ventral hippocampus, with an IC50 value of approximately 50 nM. These results are discussed with respect to the colocalization of galanin- and choline acetyltransferase-like immunoreactivity in septal somata projecting to the hippocampus.