The rat retrosplenial granular cortex (RSG) receives cholinergic input from the medial septum–diagonal band (MS–DB) of the cholinergic basal forebrain (CBF), with projections terminating in layers I–III of RSG. The modulatory effects of acetylcholine (ACh) on cortical GABAergic interneurons in these layers are mediated by α7 nicotinic acetylcholine receptors (α7nAChRs). α7nAChRs are most abundant in the cerebral cortex and are largely localized to GABAergic interneurons. However, the CBF projection to the RSG has not been studied in detail, and the cellular or subcellular distribution of α7nAChRs in the rat RSG remains unclear. The main objective of this study was to test that α7nAChRs reside on GABAergic interneurons in CBF terminal fields of the rat RSG.First, we set out to define the characteristics of CBF projections from the MS–DB to layers of the RSG using anterograde neural tracing and immunohistochemical labeling with cholinergic markers. These results revealed that the pattern of axon terminal labeling in layer Ia, as well as layer II/III of the RSG is remarkably similar to the pattern of cholinergic axons in the RSG. Next, we investigated the relationship between α7nAChRs, labeled using either α-bungarotoxin or α7nAChR antibody, and the local neurochemical environment by labeling surrounding cells with antibodies against glutamic acid decarboxylase (GAD), parvalbumin (PV) and reelin (a marker of the ionotropic serotonin receptor-expressing GABAergic interneurons). α7nAChRs were found to be localized on both somatodendritic and neuronal elements within subpopulations of GABAergic PV-, reelin-stained and non PV-stained neurons in layers I–III of the RSG. Finally, electron microscopy revealed that α7nAChRs are GAD- and PV-positive cytoplasmic and neuronal elements.These results strongly suggest that ACh released from CBF afferents is transmitted via α7nAChR to GAD-, PV-, and reelin-positive GABAergic interneurons in layers I–III of the RSG.