AbstractField recordings of the entorhinal cortex (EC) were studied and compared to those recorded concomitantly in the dentate region of the hippocampal formation (HPC) in the urethane anesthetized rat. The EC, like the HPC, showed two main variations of spontaneous field activity: a desynchronized, large amplitude irregular activity and a synchronized, rhythmic, slow frequency field activity (RSA or theta). Corroborating previous research, a phase reversal was seen across layer II of the EC and when recorded superficial to this layer, EC theta was phase‐locked to that recorded from the HPC (dentate). Entorhinal cortex (and HPC) theta could be evoked by the application of moderate tail pinches (sensory stimulation), by pharmacological treatments enhancing cholinergic transmission, and by electrical stimulation of the posterior hypothalamus. Spectral analysis revealed that in all cases, theta was produced coherently across the two limbic structures. Entorhinal cortex (and HPC) production of theta could be abolished by pharmacological treatments disrupting cholinergic transmission, and by reversible procaine inactivation of the medial septal region. Therefore, it was concluded that limbic theta is modulated spontaneously, and with sensory and hypothalamic stimulation through the activity of cells in the medial septal region via muscarinic neurotransmission. It was also hypothesized that the activation of cells in the posterior hypothalamus linearly codes the frequency, and to a lesser extent the power, of EC and HPC theta. Given these findings and the coincidence and coherence of the occurrence of theta across the EC and HPC, it was postulated that it occurs via a parallel mechanism in the two area