The modulation by muscarine or LHRH of the potassium M-current (IM) in whole-cell voltage-clamped bullfrog sympathetic neurons presents an initial phase of current reduction, followed, after agonist removal, by a transient enhancement or “overrecovery.” Employing a fast solution exchange system, an inhibitory process and an enhancing process were distinguished kinetically. The extent of overrecovery increased with the extent of the preceding inhibition. The rate and degree of inhibition increased with the concentration of agonist. In contrast, the rate of recovery and the extent of overrecovery were independent. The half-lives of the inhibitory and enhancing processes were 21 and 53 sec, respectively. Several observations suggest that arachidonic acid (AA) may be involved in overrecovery: (1) AA enhanced IM in a dose- dependent and reversible manner, with an IC50 of 2.8 microM. (2) Muscarine inhibited the A-current (IA), a potassium current that is blocked by AA. (3) Phospholipase A2 inhibitors (quinacrine and bromophenacyl bromide) and a lipoxygenase inhibitor (nordihydroguaiaretic acid) prevented overrecovery, without affecting the rate or extent of IM inhibition significantly. However, kinetic analysis indicates that these drugs were preventing overrecovery by prolonging the half-life of the inhibitory process to > 80 sec (e.g., not necessarily by blocking the enhancing pathway). In addition, the extent of IA inhibition was less than expected if AA was mediating both IM enhancement and IA inhibition. The observed relation between extent and rate of overrecovery, and the action of arachidonic acid metabolism inhibitors can be accounted for by a model proposing that the agonist alters the equilibrium between three pools of M-channels.