The remarkable capacity of transplanted embryonic neurones to innervate the hippocampal formation of mature recipients has been well documented, with the pattern of innervation being shown to be anatomically specific and to resemble normal connectivity1-3. Although transplants are known to have functional consequences in other systems4-9, information has yet to be obtained regarding the functional nature of embryonic septal transplants and the behavioural consequences of transplant innervation of the host hippocampal formation. We provide here evidence that a reinnervation of the hippocampal formation from cholinergic-rich septal transplants is functional in terms of the physiology of neural connectivity and that the newly formed connections can interact with an intrinsic afferent system, the perforant path. Moreover, we demonstrate that the reinnervation can aid in the partial recovery of the performance of a radial maze task that is thought to depend on the integrity of septohippocampal connections10. The behavioural performance of animals with transplants improved significantly compared with those without transplants when both groups were systemically injected with the acetylcholinesterase (AChE) inhibitor, physostigmine. These results suggest that neural transplants from embryonic tissue that reinnervate the hippocampal formation can form functional synaptic connections that can lead to the partial restoration of maze performance.