Brain cytoplasmic 1 (BC1) RNA is a small non-translated RNA polymerase III transcript. Because this RNA can be detected in the rat posterior pituitary with 35S in situ hybridization autoradiography, it has been hypothesized that this RNA might be transported in the axons of hypothalamo-neurohypophyseal neurons. In the present study, we aimed to determine the cellular localization of BC1 more precisely by using non-radioactive in situ hybridization of BC1 RNA at both the light and electron microscopic levels. Our studies revealed that BC1 RNA was indeed located intra-axonally. Furthermore, BC1 RNA was abundant within a subset of axonal swellings and/or terminals, and was also found in discrete cytoplasmic domains of undilated axonal segments. Using a semiquantitative in situ hybridization approach, we have measured and compared the changes in BC1 RNA and arginine vasopressin (AVP) mRNA during dehydration (chronic salt-loading) and rehydration. Chronic salt-loading significantly increased both BC1 RNA and AVP mRNA. The increase in BC1 RNA labelling (2.5-fold), however, was modest and somewhat less enduring than the increase in AVP mRNA labelling (13-fold). Upon rehydration, both the BC1 and vasopressin transcripts in the posterior pituitary rapidly returned to control values. In conclusion, like vasopressin mRNA, BC1 RNA is transported in axons of the hypothalamo-neurohypophyseal system where it aggregates in a subset of axonal swellings, and its axonal transport is similarly regulated. Therefore, we propose that BC1 RNA might be involved in the axonal targeting, docking and/or transport of AVP or other axonal mRNAs.