This study tests the hypothesis that nicotinic cholinergic receptors, including those sensitive to the antagonist alpha-bungarotoxin, are decreased in the hippocampus of schizophrenics. The hypothesis is derived from the finding that alpha-bungarotoxin causes a defect in the inhibitory gating of auditory-evoked potentials in laboratory animals that resembles a defect in auditory sensory gating observed in schizophrenics. Nicotine transiently normalizes this psychophysiological deficit in schizophrenic patients. Postmortem brain tissue was obtained from eight schizophrenic and eight age-matched nonschizophrenic subjects. Sections of the hippocampus were labeled with [125I alpha-bungarotoxin and imagined by autoradiography. Binding of the nicotinic agonist [3H]-cytisine was determined in tissue homogenates. alpha-Bungarotoxin labeled a population of putative interneurons in the hippocampus, primarily in the dentate gyrus and the CA3 region of Ammon's horn. This labeling was significantly decreased in the tissue from the schizophrenic patients, with seven or eight patients below the range of the nonschizophrenic subjects. There was also a significant decrease in the binding of cytisine. The results were not related to generalized hippocampal cell loss, drug exposure at time of death, or smoking history. This initial study suggests that schizophrenic patients have fewer nicotinic receptors in the hippocampus, a condition which may lead to failure of cholinergic activation of inhibitory interneurons, manifest clinically as decreased gating of response to sensory stimulation.