Hippocampal activity in vivo is characterized by concurrent oscillations at theta (4–15 Hz) and gamma (20–80 Hz) frequencies. Here we show that cholinergic receptor activation (methacholine 10–20 nm) in hippocampal slice cultures induces an oscillatory mode of activity, in which the intrinsic network oscillator (located in the CA3 area) expresses simultaneous theta and gamma network oscillations. Pyramidal cells display synaptic theta oscillations, characterized by cycles consisting of population EPSP-IPSP sequences that are dominated by population IPSPs. These rhythmic IPSPs most probably result from theta-modulated spiking activity of several interneurons. At the same time, the majority of interneurons consistently display synaptic gamma oscillations. These oscillatory cycles consist of fast depolarizing rhythmic events that are likely to reflect excitatory input from CA3 pyramidal cells. Interneurons comprising this functional group were identified morphologically. They include four known types of interneurons (basket, O-LM, bistratified and str. lucidum-specific cells) and one new type of CA3 interneuron (multi-subfield cell). The oscillatory activity of these interneurons is only weakly correlated between neighbouring cells, and in about half of these (44 %) is modulated by depolarizing theta rhythmicity. The overall characteristics of acetylcholine-induced oscillations in slice cultures closely resemble the rhythmicity observed in hippocampal field and single cell recordings in vivo. Both rhythmicities depend on intrinsic synaptic interactions, and are expressed by different cell types. The fact that these oscillations persist in a network lacking extra-hippocampal connections emphasizes the importance of intrinsic mechanisms in determining this form of hippocampal activity.