Innervation of specific peptidergic and cholinergic compartments of the interpeduncular nucleus (IPN) was investigated using embryonic cell suspension transplants immunoreactive for substance P (SP) and ChAT. In both neonatal and adult host rats, the IPN was first denervated of its normal SP and cholinergic input from the medial habenula by bilateral lesions of the fasciculi retroflexi (FR). In adult hosts, transplants of embryonic habenular cells placed near the denervated IPN mediated a return of the normal pattern of SP staining restricted to habenula- target subnuclei, plus an increase in staining intensity of SP cells intrinsic to the IPN. There was no recovery of ChAT staining. A similar pattern of SP staining resulted following habenular transplants into neonatal hosts, but in addition there was a partial recovery of normal ChAT staining in cholinergic subnuclei and anomalous ChAT staining in normally peptidergic subnuclei. Control transplants of embryonic thalamus cells placed into adult hosts produced a surprising pattern of ChAT staining in the IPN identical to that seen with habenula transplants placed into neonatal hosts; the adult IPN was thus able to support reinnervation mediated by an aberrant cholinergic source while being refractory to its normal habenular cholinergic afferents. This pattern of results implies regulation by the IPN of habenular SP and cholinergic innervation, and some interaction between the maturing normal cholinergic afferents and their targets that is missing when these afferent sources are abnormal.