The hippocampus is of critical importance for the organization of selective attention and memory. The acivity of its neurons is rhythmically modulated by the direct afferent input from cholinergic and GABAergic neurons of the medial septal nucleus and nucleus of diagonal band (MS-DB). This modulation is expressed in hippocampal electroencephalogram as slow (4-9 Hz) sinusoidal theta rhythm. The paper presents a short review of the authors' data on the properties of the MS-DB cells, their interactions in organization of the theta expression in the hippocampus, and probable functional significance of this rhythm. Extracellular registration of neuronal activity of the MS-DB and hippocampus was performed in chronic alert rabbits with transection of various afferent pathways, in brain slices, and in the embryonic tissue grafts developing in the anterior eye chamber and brain of adult recipients. Theta modulation disappeared in all structures deprived of the MS-DB afferent connections, but was retained by the MS-DB neurons under isolation conditions. A limited group of the MS-DB neurons (6-8%) discharged in regular bursts after complete synaptic blockade in high Mg2+ - low Ca2+ medium, while other neurons in these conditions exibited the highly regular single-spike activity. Thus, the MS-DB neurons can be regarded as bursting and regular pacemakers. The frequency of bursts and the number of neurons secondarily involved into rhythmic activity are parallely increased by the afferent stimulation - either natural (sensory stimuli), or imitated by electrical stimulation of the ascending reticular formation. An increase in the number of the MS-DB neurons involved in theta-bursts with resulting expression of theta rhythm in EEG can be obtained also by up-regulation of endogenous acetylcholine (by physostigmine), but in this case the frequency of theta is not changed. The MS-DB neurons contain acetylcholine and BABA as neurotransmitters. Analysis of their effects of agonists and antagonists suggests that the frequency of theta depends on GABAergic mechanism, while its power is controlled by cholinergic influences, In the control state input signals triggered in the hippocampal neurons inhibitory reset with following synchronous thetamodulation, gradually habituating during repeated presentations of the stimulus. At the background of continuous theta evoked by physostigmine the responses were blocked or significantly depressed, while after theta suppression by scopolamine the efficacy of the stimuli was increased, and habituation was absent. In is suggested that theta-rhythm operates as a selective filter: it augments and prolongs the input signal by which it was triggered, and simultaneously protects it from the interference of extraneous stimuli, appearing during its processing and registration. Tn this way theta rhythm may be regarded as an important mechanism of selective attention, which is prerequisit for memory trace formation.