Glutamic acid decarboxylase (GAD), the enzyme that synthesizes the neurotransmitter, GABA, was immunocytochemically localized in axon terminals as well as in small and medium-sized neurons of the rat substantia nigra. The pattern formed by GAD-containing axon terminals with the dendrites and somata of neurons in the substantia nigra was altered following ipsilateral hemitransections of the striatonigral and pallidonigral pathways. A marked reduction of GAD-positive terminals occurred throughout this brain region, but the ventral fifth of the pars reticulata showed a nearly normal pattern of GAD-positive axon terminals. The results of this investigation are consistent with results from biochemical studies which have indicated that the striatonigral and/or pallidonigral pathways are GABAergic. In addition, these results suggest that the residual GABAergic terminals remaining after hemitransection are derived from intrinsic neurons of the substantia nigra.