The discharge patterns of cells located in the medial septum (MS)/vertical limb of the Diagonal Band of Broca (vDBB) were recorded simultaneously with hippocampal formation large amplitude irregular activity (LIA), or theta, in urethane-anesthetized rats. The main conclusion was that the majority of cells in the MS/vDBB were theta-related and could be classified according to the same scheme developed for theta-related cells in the hippocampal formation. That is, cells were classified as theta-on or theta-off, with subtypes defined as tonic or phasic, linear or non-linear. The discharge properties of hippocampal and MS/vDBB cell populations were compared. It was argued that this classification scheme encompassed all the crucial properties of theta-related cells in the hippocampal formation and the MS/vDBB. An alternative model to the septal pacemaker hypothesis, concerning the role of the medial septum in the generation of hippocampal formation theta activity, was presented and discussed.