We previously reported that subchronic administration of cocaine for 5 days via slow-release pellets results in pronounced degeneration in the lateral habenula (LHB) and its primary efferent tract, the fasciculus retroflexus [Ellison (1992): Brain Res 598:353-356; Ellison and Switzer (1993): Neuroreport 5:17-20]. The lateral habenula receives both GABA and glutamate afferents. In order to test the hypothesis that the cocaine-induced degeneration of the fasciculus retroflexus may be related to changes in synaptic activity of either GABA or glutamate nerve terminals within the LHB, the density of nerve terminal immunolabeling of either neurotransmitter was quantified after 5 days of chronic drug administration followed by either 1 or 14 days off the drug. The shell of the nucleus accumbens (NACs) was also analyzed, since this area is thought to be associated with the reward aspects of addictive stimulant drug administration and was previously shown not to be associated with fiber degeneration. We found that cocaine treatment resulted in a significant decrease in the density of nerve-terminal GABA immunolabeling located within the LHB in animals taken off the drug for either 1 or 14 days, while there was no change in the density of glutamate immunolabeling. In the NACs, there was a decrease in the density of glutamate immunolabeling within nerve terminals 1 day but not 14 days after cocaine administration. There was no change in the density of GABA immunolabeling within the NACs following the 1 or 14 day-off period. These results suggest that there are long-term changes in the density of GABA immunolabeling within the LHB and that the effects seen in glutamate synapses within the NACs are transitory. The long-term decrease in GABA immunolabeling within the LHB is consistent with the hypothesis that a decrease in inhibitory synaptic activity, leading to increased excitatory influence on LHB neurons, may result in neurotoxicity and the subsequent degeneration of the fasciculus retroflexus.