The stimulation of phospholipid labeling by muscarinic agonists has been examined in nerve ending preparations from lesioned hippocampus in order to investigate the synaptic locus of the effect. Unilateral injections of the neurotoxin, ibotenic acid, into the hippocampus resulted in an extensive loss of nerve cells from both the dentate gyrus and hippocampus on the lesioned side and a parallel loss of muscarinic receptors as revealed by [3H]quinuclidinyl benzilate autoradiography. Homogenates and nerve ending fractions prepared from the lesioned side of the hippocampus possessed a reduced specific activity (expressed per milligram of protein) of glutamic acid decarboxylase as well as a reduced number of muscarinic receptors compared with the control side. By contrast, choline acetyltransferase activity was either unchanged or slightly increased on the lesioned side. Although there was a reduced yield (25%) of nerve endings from the lesioned side, the specific activity of 32Pi incorporation into phospholipids in the absence of added carbachol was comparable to that of the control side. There was, however, a marked reduction in the carbachol stimulation of phosphatidic acid and phosphatidylinositol labeling in nerve ending fractions obtained from he lesioned hippocampus. These results indicate that the muscarinic receptors present in nerve ending fractions from hippocampus and implicated in stimulated phospholipid turnover are derived from cholinoceptive intrinsic neurons.