Neuropeptide Y and corticotropin-releasing hormone are involved in the regulation of various physiological functions including the expression of anxiety and fear. The anxiogenic effects of corticotropin-releasing hormone can be modulated by neuropeptide Y, yet the brain regions involved in this interaction are only partly understood. By utilizing antibodies raised against neuropeptide Y and the Y1 receptor protein we identified a densely labeled cell group in the dorsal zone of caudal part of the rat lateral septum. Bilateral microinjections of neuropeptide Y into the dorsocaudal lateral septum but not into the intramedial septum dose-dependently decreased anxiety in the social interaction test of rats, whereas the effects of corticotropin-releasing hormone were opposite. The anxiogenic-like effect of corticotropin-releasing hormone was reversed by neuropeptide Y pretreatment. Local microinjection of the neuropeptide Y receptor selective antagonists revealed that neither Y1 receptor nor Y2 receptor selective antagonists had effects on experimental anxiety on their own suggesting that neuropeptide Y-induced anxiolysis is not tonic. The Y1 receptor antagonist blocked the anxiolytic-like effect of neuropeptide Y, while the Y2 receptor antagonist was ineffective.We conclude that neuropeptide Y in the dorsocaudal lateral septum may act as an endogenous anxiolytic and antagonize corticotropin-releasing hormone (stress)-induced anxiety. This functional antagonism probably shapes behavior under aversive conditions, as neuropeptide Y-induced anxiolysis is not tonic in nature. An imbalance between these two neuropeptide systems in the septum may lead to a maladaptive expression of anxiety after stress exposure.