Hyperpolarization-activated, cyclic nucleotide-gated cation (HCN) channels are expressed postsynaptically in the rodent globus pallidus (GP), where they play several important roles in controlling GP neuronal activity. To further elucidate the role of HCN channels in the GP, immunocytochemical and electrophysiological approaches were used to test the hypothesis that HCN channels are also expressed presynaptically on the local axon collaterals of GP neurons. At the electron microscopic level, immunoperoxidase labelling for HCN1 and HCN2 was localized in GP somata and dendritic processes, myelinated and unmyelinated axons, and axon terminals. One population of labelled terminals formed symmetric synapses with somata and proximal dendrites and were immunoreactive for parvalbumin, consistent with the axon collaterals of GABAergic GP projection neurons. In addition, labelling for HCN2 and, to a lesser degree, HCN1 was observed in axon terminals that formed asymmetric synapses and were immunoreactive for the vesicular glutamate transporter 2. Immunogold labelling demonstrated that HCN1 and HCN2 were located predominantly at extrasynaptic sites along the plasma membrane of both types of terminal. To determine the function of presynaptic HCN channels in the GP, we performed whole-cell recordings from GP neurons in vitro. Bath application of the HCN channel blocker ZD7288 resulted in an increase in the frequency of mIPSCs but had no effect on their amplitude, implying that HCN channels tonically regulate the release of GABA. Their presence, and predicted role in modulating transmitter release, represents a hitherto unidentified mechanism whereby HCN channels influence the activity of GP neurons.