The basal forebrain (BF) contains cholinergic as well as different types of non-cholinergic corticopetal neurons and interneurons, including neuropeptide Y (NPY) containing cells. BF corticopetal neurons constitute an extrathalamic route to the cortex and their activity is associated with an increase in cortical release of the neurotransmitter acetylcholine, concomitant with low voltage fast cortical EEG activity. It has been shown in previous studies (Duque et al. in J Neurophysiol 84:1627-1635, 2000) that in anesthetized rats BF cholinergic neurons fire mostly during low voltage fast cortical EEG epochs, while increased NPY neuronal firing is accompanied by cortical slow waves. In this paper, electrophysiologically and neurochemically characterized cholinergic and NPY-containing neurons were 3D reconstructed from serial sections and morphometrically analyzed. Cholinergic and NPY-containing neurons, although having roughly the same dendritic surface areas and lengths, were found to differ in dendritic thickness and branching structure. They also have distinct patterns of dendritic endings. The subtle differences in dendritic arborization pattern may have an impact on how synaptic integration takes place in these functionally distinct neuronal populations. Cholinergic neurons exhibited cortically projecting axons and extensive local axon collaterals. Elaborate local axonal arbors confined to the BF also originated from NPY-containing neurons. The presence of local axon collaterals in both cholinergic and NPY neurons indicates that the BF is not a mere conduit for various brainstem inputs to the cortex, but a site where substantial local processing must take place.