The neuropeptides vasopressin and oxytocin were first characterized as hormones, i. e., signalling molecules which are synthesized in hypothalamic neurones, transported toward the neurohypophysis and from there secreted into the general circulation. Although extrahypophysial Gomori-positive pathways were described in the brain as early as the mid-1950s, it is only during the last decade that the neurotransmitter role of vasopressin and oxytocin has begun to be investigated. Recent electrophysiological and morphological studies from our laboratory are summarized. Using extracellular and intracellular recordings from in vitro brain slices, a direct excitatory action of vasopressin was demonstrated in the lateral septum and in the nucleus of the solitary tract. This action of vasopressin was mediated by V1-type receptors. An excitatory effect of oxytocin, mediated by receptors similar to those present in uterus, has also been found in the dorsal motor nucleus of the vagus nerve. In accordance with these results, light microscopic autoradiography showed the presence in these brain areas of high affinity binding sites for vasopressin and for oxytocin, respectively. While these data corroborate the notion that vasopressin and oxytocin are probably involved in interneuronal communications, several questions, however, remain. The membrane mechanism by which vasopressin and oxytocin cause neuronal excitation is still unknown and evidence that endogenous vasopressin and oxytocin act at central synapses deserves further investigation.