Extracellular recordings have elucidated spatial neural representations without identifying underlying microcircuits. We labeled neurons juxtacellularly in medial entorhinal cortex of freely moving rats with a friction-based, pipette-stabilization system. In a linear maze novel to the animals, spatial firing of superficial layer neurons was reminiscent of grid cell activity. Layer 2 stellate cells showed stronger theta modulation than layer 3 neurons, and both fired during the ascending phase of field potential theta. Deep-layer neurons showed little or no activity. Layer 2 stellate cells resided in hundreds of small patches. At the dorsomedial entorhinal border, we identified larger (putative parasubicular) patches, which contained polarized head-direction selective neurons firing during the descending theta phase. Three axon systems interconnected patches: centrifugal axons from superficial cells to single large patches, centripetal axons from large-patch cells to single small patches, and circumcurrent axons interconnecting large patches. Our microcircuit analysis during behavior reveals modularity of entorhinal processing.