Abstract We have analyzed the neuropathology of the substantia nigra in four cases of progressive supranuclear palsy compared with age-matched controls and patients with Parkinson's disease. Although there are many reports of severe dopaminergic cell loss in progressive supranuclear palsy, the fate of the GABAergic pars reticulata neurones remains unclear. Serial section analysis and fractional counts of pars compacta neurones (identified by their neuromelanin pigment) and pars reticulata neurones (identified using parvalbumin immunohistochemistry) were performed, and the type and distribution of neuropathology were described. Severe neurodegeneration within the dopaminergic pars compacta was seen in all cases of progressive supranuclear palsy and all cases of Parkinson's disease compared with controls. Lewy body pathology was found only in cases of Parkinson's disease, while neurofibrillary tangles were seen only in cases of progressive supranuclear palsy. Tau-positive astrocytes and neuropil threads were occasionally seen in controls and cases of Parkinson's disease (particularly those of advanced age) but were extremely numerous in all cases of progressive supranuclear palsy. There was a similar decrease in parvalbumin immunoreactivity within the pars reticulata in both progressive supranuclear palsy and Parkinson's disease. However, there was a striking 70% reduction in the number of pars reticulata neurones in progressive supranuclear palsy, with no cell loss observed in Parkinson's disease compared with controls. Our results show that both the dopaminergic pars compacta and the GABAergic pars reticulata are significantly damaged in cases of progressive supranuclear palsy. The distribution of neurodegeneration in patients with Parkinson's disease and progressive supranuclear palsy is discussed with respect to the current theories on pathophysiology in basal ganglia circuitry.