The lateral habenula (LHb) plays a key role in linking limbic forebrain and midbrain structures. It is well established that the LHb receives afferent fibres from the lateral hypothalamic area (LHA). Orexin is a neuropeptide involved in promoting arousal state and is expressed by LHA neurons. Orexinergic terminals are present in the LHb, but little is known about this input, in particular, there is no electrophysiological characterization of the effects of orexin on LHb neuronal activity. In order to address this, we recorded extracellular, single-unit activity from Wistar rat LHb brain slices in vitro. Bath application of orexin-A (50, 100 or 300 nM) either inhibited (55/86 of cells tested; >50%) or had a null effect on basal firing rate. To verify whether orexin-A induced inhibition was mediated by GABAergic neurotransmission, gabazine, a GABAA receptor antagonist, was applied to the bath. Blockade of GABAA receptors inhibited a sub-population of LHb neurons (21/40 of tested cells; 50%) and potentiated the inhibitory action of orexin-A when co-applied with the latter. To better understand the effects of orexin on the membrane properties of LHb neurons, we also performed in vitro whole-cell current-clamp recordings from LHb cells. Orexin-A elicited a hyperpolarization in the majority of cells recorded followed in some cases by membrane potential oscillations that triggered bursts of action potentials. Finally, we recorded LHb neurons in vivo in urethane anaesthetised (1.5 g/kg, i.p.) Wistar rats. Consistent with in vitro findings, about half of the cells (22/50 of tested cells) recorded extracellularly in vivo showed a decrease in mean firing rate following intracerebroventricular administration of orexin-A (30 μM or 100 μM). Collectively, these data suggest an inhibitory action of orexin-A on a subpopulation of LHb neurons. Further, since it is well known that orexin receptor activation has an excitatory effect on neuronal activity, it is likely that the effects we observed are mediated by an orexin-dependent recruitment of local GABAergic circuitry. All procedures were carried out in accordance with the Animal (Scientific Procedures) Act 1986, UK.