Glutamatergic influence on the medial septum diagonal band of Broca complex (MSDB) is a crucial and powerful driver of hippocampal theta rhythm and associated memory processes, in the rat. The recent discovery of vesicular glutamate transporters (VGLUT) provided a specific marker for glutamatergic neuronal elements. Therefore, this study aimed to address two specific questions: (1) do glutamatergic axons innervate MSDB gamma-aminobutyric acid (GABA)ergic, parvalbumin (PV)-containing septohippocampal neurons that are known to have a great influence on the electric activity of the hippocampus; and (2) is the origin of these glutamatergic axons extrinsic and/or intrinsic to the septum. The results of the correlated light and electron microscopic double-labeling immunohistochemistry for VGLUT2 and PV, and single immunostaining for VGLUT2 in colchicine-treated animals, showed that (1) VGLUT2-containing boutons establish asymmetric synaptic contacts with PV-positive perikarya and dendrites; (2) a large population of VGLUT2-immunoreactive neurons is located primarily in the posterior division of the septum; and (3) following surgical fimbria/fornix transection and septal undercut, most VGLUT2-containing axons, including those terminating on MSDB PV cells, remains intact. The latter two observations suggest that the major portion of MSDB glutamate axons have an intraseptal origin and raise a novel functional aspect of glutamatergic cells as local circuit neurons. A constant impulse flow in the septohippocampal GABA pathway is essential for the generation of theta rhythm. Thus, the heavy glutamatergic innervation of these septohippocampal GABA cells establishes the morphological basis for the powerful glutamatergic influence upon theta rhythm and hippocampus-associated memory processes.