The effect of early postnatal (day 8) intracerebroventricular injections of the putative cholinotoxin ethylcholine aziridinium mustard (AF64A) on development of cholinergic innervation and postsynaptic muscarinic acetylcholine receptors in the rat hippocampus was examined. The cholinotoxin applied at this stage of development leads to a permanent denervation of cholinergic fibres in the hippocampus in adulthood demonstrated by (immuno)histochemical methods and biochemical assays. Muscarinic receptor expression in the principal neurons of dentate gyrus and cornu ammonis was strongly reduced as studied by immunostaining with antibodies against muscarinic receptor proteins and binding assays with the muscarinic antagonist quinuclidinyl benzilate. Cholinoceptive interneurons and somatostatinergic interneurons are not affected by the developmental cholinergic lesion. Immunoreactivity to protein kinase C type I as a marker for inositolphosphate-related cellular activation systems slightly decreased in the apical dendrites of the hippocampal principal neurons. These findings indicate that damage to ingrowing cholinergic terminals in the hippocampus in the early postnatal period is a critical hazard for development of the muscarinic receptor system in the hippocampal principal neurons. These results are discussed for their significance to the neural mechanisms that underlie perinatal brain damage and associated cognitive dysfunction.