l-Glutamate decarboxylase (GAD, EC 4.1.1.15), the enzyme which catalyzes the α-decarboxylase of l-glutamate to form γ-aminobutyric acid (GABA), was localized both light and electron microscopically in rat substantia nigra by an immunoperoxidase method. Large amounts of GAD-positive reaction product were seen throughout the substantia nigra in light microscopic preparations, and it appeared to be localized in punctate structures that were apposed to dendrites and somata. Electron microscopic studies revealed that most of the axon terminals in the substantia nigra were filled with GAD-positive reaction product and formed both axodendritic and axosomatic synapses. Many dendrites were extensively surrounded by GAD-positive terminals which most commonly formed symmetric synaptic junctions, although some formed asymmetric synaptic junctions. The results of this investigation are consistent with biochemical, pharmacological and physiological data which have indicated that neurons of the neostriatum and globus pallidus exert a GABA-mediated, postsynaptic inhibition upon the neurons of the substantia nigra. These findings provide another example in the vertebrate central nervous system where Golgi I projection neurons are inhibitory and use GABA as their neurotransmitter. © 1976.