Previous light microscopic immunocytochemical studies with antibodies against transmitter-synthesizing enzymes have suggested that septohippocampal neurons undergo retrograde degeneration following transection of their axons by cutting the fimbria-fornix. However, a fine-structural analysis of the degeneration process in these cells is lacking so far. Here we have identified septohippocampal neurons by retrograde tracing with Fluoro-Gold. Thereafter, the fimbria-fornix was transected bilaterally. Fine-structural changes in prelabeled septohippocampal neurons were then studied after varying survival times up to 10 weeks. Examination under the fluorescence microscope of Vibratome sections through the septal region revealed numerous retrogradely labeled cells after all survival times following axotomy. These neurons were then intracellularly injected with the fluorescent dye Lucifer Yellow in order to stain their dendritic arbor. Many cells were found after each survival time that displayed characteristics of septohippocampal neurons in control rats (see Naumann et al., J Comp Neurol 325:207-218, 1992). In addition, increasing with survival time, there were many shrunken neurons with a reduced dendritic arbor. Representative examples of both normal appearing and shrunken neurons were photoconverted for subsequent electron microscopic analysis. Relatively few signs of neuronal degeneration were found at each survival time analyzed. The majority of cells, including the heavily shrunken ones, displayed fine-structural characteristics of normal neurons. However, a few degenerating neurons and reactive glial cells were present in all survival stages. We conclude that axotomized septohippocampal projection neurons cease the expression of transmitter-synthesizing enzymes and shrink, but many more cells survive for extended periods of time without target-derived neurotrophic factor than was assumed in previous light microscopic studies.