The striatum of rats was lesioned by unilateral administration of MPP+. Two weeks later, a suspension of fetal mesencephalic cells (FMC), obtained from 14-day rat embryos, was injected into the lesioned striatum. Two weeks after grafting, the success of implantation and recovery of dopamine function were assessed by tyrosine hydroxylase immunocytochemistry (TH) and the measurement of striatal dopamine content. In addition, the extracellular concentrations of dopamine and dopamine metabolites were studied by microdialysis in vivo before and after perfusion of MPP+ to induce dopamine release from vesicular stores. TH+ cell bodies were seen in the lesioned grafted striata, indicating that fetal cells survived in these striata. In addition, there was a marked increase in TH-immunoreactivity in the neuronal fibers and terminals in the area surrounding the cell implant, suggesting a compensatory response of the host tissue which may involve fiber sprouting. Grafting induced a recovery in indices of dopamine function, including recovery in dopamine content, and basal and MPP+-induced dopamine release. Thus, grafts of FMC may provide a significant recovery of dopamine function in MPP+-lesioned striata.