Stomatogastric nervous systems of the shrimp, Palaemon serratus, were stained with antisera raised against the peptide FMRFamide. FMRFamide- like immunoreactivity was found in fibers in the input nerve to the stomatogastric ganglion (STG), in several STG somata, in dense neuropil in the STG, in the motor nerves that innervate the dilator muscles of the pyloric region, but not in the pyloric dilator (PD) motor neurons. FMRFamide and several FMRFamide-like peptides elicited sequences of rhythmic depolarizations and contractions of the pyloric dilator muscle. As peptide concentrations were increased, a discrete threshold for contraction was found, above which contractions were initiated with a decreasing latency in an all-or-none fashion. Muscles stopped rhythmically contracting after many seconds to several minutes of activity; the duration of spontaneous oscillatory activity in peptide was proportional to the concentration of applied peptide. In the absence of peptide, each motor neuron discharge evoked small graded muscle contractions. During peptide-induced oscillations, motor neuron activity did not always entrain muscle oscillations. After spontaneous oscillations had stopped, when the motor neurons were stimulated in the presence of the peptide, each motor neuron burst evoked large amplitude contractions as a result of the peptide-induced regenerative properties of the muscle membrane.