The habenular complex of the epithalamus in the mammalian brain receives input from the limbic forebrain and pallidum and, in turn, projects to numerous midbrain structures. Traditionally, the habenular complex is divided into the medial nucleus and two divisions of the lateral nucleus. Based on their distinct input and output pathways, the habenula is considered to constitute three, partially overlapping channels that regulate information flow from the limbic forebrain and pallidum to the midbrain. As a step to improve our understanding of how information delivered from the limbic forebrain and pallidum is processed in the habenula, we examined the electrical property and morphology of medial and lateral habenular cells. For this study, we generated live brain slices from rat habenula and performed whole cell recording. During recording, we filled habenular cells with biocytin. Medial habenular cells generate tonic trains of action potentials, whereas lateral habenular cells are capable of producing action potentials in burst mode. Lateral habenular cells produce dendrites that are much longer than those of medial habenular cells. Two distinct intrinsic circuits exist in the medial habenular nucleus, whereas in the lateral habenular nucleus, intrinsic axons travel largely from medial to lateral direction. The connection between the two habenular nuclei is asymmetrical in that only the medial habenula sends projection to the lateral habenula. The differences in the electrical and morphological properties of medial and lateral habenular cells indicate that the two nuclei process and integrate information in distinct fashions that is delivered from the limbic forebrain and pallidum.