Extracellular recordings were obtained from single neurons located in the lateral septum, an area known to receive a vasopressinergic innervation in the rat brain. Approximately half of the neurons tested responded to 8-L-arginine vasopressin (AVP) by a marked increase in firing rate at concentrations greater than 1 nM. The effect of vasopressin was blocked by synthetic structural analogues possessing antagonistic properties on peripheral vasopressin and oxytocin receptors. Oxytocin was much less potent than vasopressin in firing septal neurons, and a selective oxytocic agonist was totally ineffective. The action of vasopressin on neuronal firing was mimicked by the vasopressor agonist [2-phenylalanine,8-ornithine]vasotocin but not by the selective antidiuretic agonist 1-deamino[8-D-arginine]vasopressin. In a parallel study, sites that bind [3H]AVP at low concentration (1.5 nM) were found by in vitro autoradiography in the lateral septum. Adjacent sections were also incubated with 1.5 mM [3H]AVP and, in addition, with 100 nM [2-phenylalanine,8-ornithine]vasotocin or 1-deamino[8-D-arginine]vasopressin--i.e., the same compounds as those used for the electrophysiological study. Results showed that the vasopressor agonist, but not the antidiuretic agonist, displaced [3H]AVP, thus indicating that the vasopressin binding sites detected by autoradiography in the septum were V1 (vasopressor type) rather than V2 (antidiuretic type) receptors. Based on the electrophysiological evidence, we conclude that these receptors, when occupied, lead to increased firing of lateral septal neurons.