A subset of GABAergic neurons projecting to the medial septum has long been described in the hippocampus. However, the lack of information about their local connectivity pattern or their correspondence with any of the well-established hippocampal interneuron types has hampered the understanding of their functional role. Retrograde tracing combined with immunostaining for neurochemical markers in the adult rat hippocampus showed that nearly all hippocampo-septal (HS) neurons express somatostatin (>95%) and, in the hilus and CA3 stratum lucidum, many contain calretinin (>45%). In contrast, in stratum oriens of the CA1 and CA3 subfields, the majority of HS neurons contain somatostatin (>86%) and calbindin (>73%), but not calretinin. Because somatostatin-positive hippocampal interneurons have been most extensively characterized in the stratum oriens of CA1, we focused our further analysis on HS cells found in this region. In 18–20-day-old rats, intracellularly filled CA1-HS cells had extensive local axon collaterals crossing subfield boundaries and innervating the CA3 region and the dentate gyrus. Electron microscopic analysis provided evidence that the axon terminals of CA1-HS cells form symmetrical synapses selectively on GABAergic interneurons, both locally and in the CA3 region. In addition, double retrograde labelling experiments revealed that many CA1-HS neurons of the dorsal hippocampus also have collateral projections to the ventral hippocampus. Thus, CA1-HS cells innervate inhibitory interneurons locally and in remote hippocampal regions, in addition to targeting mostly GABAergic neurons in the medial septum. This dual projection with striking target selectivity for GABAergic neurons may be ideally suited to synchronize neuronal activity along the septo-hippocampal axis.