Memory impairment in the elderly resembles a mild temporal lobe dysfunction. Alterations in the hippocampal formation are also a probable basis for cognitive deficits in some animal models of ageing. For example, aged rats are impaired in hippocampal-dependent tests of spatial memory. Recent studies have revealed considerable structural integrity in the aged hippocampus, even in aged rats with the most impaired spatial memory. In contrast, atrophy/loss of cholinergic neurons in the basal forebrain and deficiency in cholinergic transduction in hippocampus correlate with the severity of spatial memory impairment in aged rats. This evidence supports the longstanding view that age-related loss of memory has a cholinergic basis. In this context, it is somewhat surprising that the use of a selective cholinergic immunotoxin in young rats to further test this hypothesis has revealed normal spatial memory after removing septo-hippocampal cholinergic neurons. Young rats with immunotoxic lesions, however, have other behavioural impairments in tests of attentional processing. These lines of research have implications for understanding the neurobiological basis of memory deficits in ageing and for selecting an optimal behavioural setting in which to examine therapies aimed at restoring neurobiological function.