Glutamic acid decarboxylase (GAD), the enzyme that synthesizes the neurotransmitter gamma-amino-butyric acid (GABA), has been localized in the rat visual cortex by immunocytochemical methods with both light and electron microscopy. In both colchicine-injected and non-injected preparations of the visual cortex, GAD-positive reaction product was observed in somata, proximal dendrites and axon terminals of non-pyramidal neurons. The GAD-positive terminals were observed to form symmetric synaptic junctions most commonly with dendritic shafts and somata of pyramidal and stellate neurons and less frequently with initial axon segments of pyramidal neurons and dendritic spines. In colchicine-injected preparations, GAD-positive somata were located in all cortical layers including the immediately subjacent white matter. In contrast, sections from non-injected rats displayed GAD-positive somata within a superficial and a deep cortical band. The GAD-positive somata observed in both types of preparations received both symmetric and asymmetric synaptic junctions, lacked apical dendrites, and had radially oriented dendrites of small diameter. These characteristics of GAD-positive neurons indicate that they are aspinous and sparsely-spinous stellate neurons. The localization of GAD within these neurons in combination with physiological and pharmacological data indicate that these local circuit neurons mediate GABA-ergic inhibition in the neocortex.