Acetylcholine (ACh) release was studied in awake, freely moving animals in vivo microdialysis in the hippocampus of young (3-month-old) and aged (24-month-old) female Sprague-Dawley rats. Two groups of aged rats were selected on basis of their spatial learning performance in the Morris water maze: non-impaired aged rats which performed as well as the young control animals, and impaired aged rats which learnt the task very poorly. Baseline ACh overflow (in the presence of 5 μM neostigmine) was 1.9 ± 0.3 ±pmol/15min in the young animals and 1.6 ± 0.4pmol/15min in both the impaired and the non-impaired aged rats; these levels did not differ from each other. Depolarization by KCl (100 mM) or muscarinic receptor blockade by atropine (3 μM) added to the perfusion fluid produced dramatic, 4–6-fold, increases in ACh overflow that was similar in magnitude in both the young and the aged impaired and non-impaired rats. Behavioral activation by either handling or electrical stimulation of the lateral habenula produced 2–3-fold increases in extracellular ACh-levels in the hippocampus similarly in all three groups. The results indicate that hippocampal ACh release is maintained in aged rats that exhibit severe spatial learning and memory impairments and that the septo-hippocampal cholinergic system retains its capacity to increase its ACh release in response to both K +-induced depolarization and behavioral activation in the aged rat. In the subsequent morphometric analysis the cholinergic neurons in the septal-diagonal band area showed the expected reduction in both number (−20–30%) and size (−8%) in the aged impaired animals. This suggests that the ageing septo-hippocampal cholinergic system can compensate functionally for ongoing degeneration or atrophic processes also in the most severely affected aged animals. The present data do not exclude, however, that the behaviorally impaired aged rats may exhibit functionally important deficits in other dynamic aspects of cholinergic neurotransmission, or in the functional properties of the septo-hippocampal neurons not picked up by the microdialysis method.