It is proposed that taurine is an inhibitory neurotransmitter/neuromodulator in the CNS. The present study localized taurine-containing neurons within the rat hippocampus with the use of a monoclonal antibody against conjugated taurine (Tau2) in conjunction with an antiserum against cysteine sulfinic acid decarboxylase (CSADC), a synthesizing enzyme for taurine. Taurine-like immunoreactivity Tau-LI) and CSADC-LI were colocalized in neurons of the dentate gyrus, CA1(/CA2), CA3, and CA4. Of all the cells examined, pyramidal basket cells within the granule cell layer of the dentate gyrus were most intensely stained with both Tau2 and CSADC. Granule cells were also double-labeled with Tau-LI and CSADC-LI. Cell nuclei and dendrites in the CA1 region stained more intensely with Tau2 than somata. CSADC-LI was colocalized with Tau-LI within these neurons. Light staining with both Tau2 and the CSADC antiserum was inconsistently present in CA3 and CA4 neurons and was found to be highly dependent on the type of fixation and delay to fixation. Tau-LI was more consistently present in increased numbers of neurons in CA3 when glutaraldehyde was added to the paraformaldehyde fixative solution. Hippocampi which were immersion-fixed in paraformaldehyde following a 0-, 6-, or 24-hour postmortem delay exhibited a lack of Tau2 staining in the CA3 region in the majority of animals studied, similar to some paraformaldehyde perfusion-fixed rats. These studies suggest that taurine was present in the majority of neurons within the major cell layers of the rat hippocampus, but Tau-LI was more easily lost from neurons in the CA3 region following delay to fixation. The localization of Tau-LI in excitatory neurons such as granule cells and pyramidal cells is not consistent with its proposed inhibitory transmitter role. However, the prominent Tau2 staining in dendrites of the CA1 region provides anatomical support for the hypothesis that taurine may be released from dendrites in the CA1 region and may function as a neuromodulator of calcium flux in these pyramidal neurons.