Cholinergic neurons in the basal forebrain are the focus of considerable interest because they are severely affected in Alzheimer's disease. However, both cholinergic and noncholinergic neurons are intermingled in this region. The goal of the present study was to characterize the morphology and in vivo electrophysiology of noncholinergic basal forebrain neurons. Neurons in the ventral pallidum and substantia innominata were recorded extracellularly, labeled juxtacellularly with biocytin and characterized for the presence of choline acetyltransferase immunoreactivity. Two types of ventral pallidal cells were observed. Type I ventral pallidal neurons had axons that rarely branched near the cell body and tended to have smaller somata and lower spontaneous firing rates than did type II ventral pallidal neurons, which displayed extensive local axonal arborizations. Subtypes of substantia innominata neurons could not be distinguished based on axonal morphology. These noncholineregic neurons exhibited local axon arborizations along a continuum that varied from no local collaterals to quite extensive arbors. Substantia innominata neurons had lower spontaneous firing rates, more variable interspike intervals, and different spontaneous firing patterns than did type II ventral pallidal neurons and could be antidromically activated from cortex or substantia nigra, indicating that they were projection neurons. Ventral pallidal neurons resemble, both morphologically and electrophysiologically, previously described neurons in the globus pallidus, whereas the substantia innominata neurons bore similarities to isodendritic neurons of the reticular formation. These results demonstrate the heterogeneous nature of noncholinergic neurons in the basal forebrain.