The distribution and characterization of specific melatonin binding sites were studied using 125I-melatonin. Autoradiography revealed only three sites of specific melatonin binding in brain: the suprachiasmatic nuclei, the median eminence, and the small part of choroid plexus at the caudal end of the fourth ventricle. Two other sites were detected outside the CNS: the anterior pituitary and the retina. The specific binding of 125I-melatonin was saturable and reversible. The dissociation constant (KD) of the binding sites was 60 pM. The concentration of the binding sites (Bmax) in the median eminence was 26 fmol/mg protein, and in the pituitary 3 fmol/mg protein. Specificity of the binding sites was tested by displacement of 125I-melatonin. The order of potency--melatonin much less than N-acetyl-5-hydroxytryptamine less than 5-methoxytryptamine much less than 5-hydroxytryptamine = 3,4-dihydroxyphenylethylamine = noradrenaline--shows high specificity of the binding sites for melatonin.