GABA(B) receptors are believed to play a role in rhythmic activity in the mammalian brain. The aim of our study was to examine the presynaptic and postsynaptic locations of these receptors in the medial septal diagonal band area (MS/DB), an area known to pace the hippocampus theta rhythm. Whole-cell patch recordings were made from parasagittal MS/DB slices obtained from the 16-25 day rat. Neurons were classified into GABAergic and cholinergic subtypes according to previous electrophysiological criteria. Bath application of the GABA(B) receptor agonist baclofen in the presence of tetrodotoxin, and brief tetanic fiber stimulation in the presence of ionotropic receptor antagonists, provided evidence for the presence of postsynaptic GABA(B) receptor transmission to GABAergic but not cholinergic neurons. Bath application of baclofen, at concentrations too low to elicit postsynaptic activity in MS/DB neurons, significantly reduced the amplitudes of stimulus-evoked ionotropic receptor inhibitory postsynaptic potentials (IPSPs) and excitatory postsynaptic potentials (EPSPs) and the paired pulse depression of these evoked potentials. Baclofen also significantly reduced the frequencies but not the amplitudes of miniature inhibitory postsynaptic currents (IPSCs) and excitatory postsynaptic currents (EPSCs), indicating the presence of presynaptic GABA(B) receptors on GABAergic and glutamatergic terminals in the MS/DB. Baclofen, also at a concentration too low to elicit postsynaptic activity, reduced the frequencies and amplitudes of spontaneous IPSCs and EPSCs recorded in the presence of 200-400 nM kainate. Rhythmic compound IPSCs at theta frequencies were recorded under these conditions in some neurons, and these rhythmic compound IPSCs were disrupted by the activation but not by the inhibition of GABA(B) receptors. These results suggest that GABA(B) receptors modulate rather than generate rhythmic activity in the MS/DB, and that this modulatory effect occurs via receptors located on presynaptic terminals.