The rat neurohypophysis contains a population of microglial cells, the majority of which occupy a pericapillary position in the resting gland. The microglia are immunocytochemically identifiable by the presence of macrophage-associated antigens and resemble microglia of the CNS. Morphometry at light and electron microscopic levels reveals that such cells constitute approximately 19% of the intrinsic cell population, excluding the endothelial cells. Two other populations of neurohypophysial glial cells, parenchymatous pituicytes and fibrous pituicytes, do not express macrophage-associated antigens. The microglia have long processes which surround and, in some cases, engulf apparently viable portions of the magnocellular neurosecretory nerve terminals. A sequence of stages of selective endocytosis and degradation of the engulfed nerve terminals can be visualized within pericapillary microglia. Some phagosomes and secondary lysosomes contain morphologically intact neurosecretory granules; others contain partially destroyed neurosecretory granules or amorphous material all of which are identifiable as originating from the magnocellular neurosecretory terminals by their immunoreactivity for oxytocin- or vasopressin-neurophysin. This finding indicates a novel role for the microglial cells in remodelling terminal aborizations of neurosecretory neurons and in processing or degrading hormones and peptides they contain. Because of their close and selective associations with other cellular elements of the neurohypophysis, any substances produced by microglia also have the potential to influence hormone secretion, pituicyte proliferation and neurohypophysial vasculature.