1. We have studied in vivo the intracellular responses of neurones in cat visual cortex to electrical pulse stimulation of the cortical afferents and have developed a microcircuit that simulates much of the experimental data. 2. Inhibition and excitation are not separable events, because individual neurones are embedded in microcircuits that contribute strong population effects. Synchronous electrical activation of the cortex inevitably set in motion a sequence of excitation and inhibition in every neurone we recorded. The temporal form of this response depends on the cortical layer in which the neurone is located. Superficial layer (layers 2+3) pyramidal neurones show a more marked polysynaptic excitatory phase than the pyramids of the deep layers (layers 5+6). 3. Excitatory effects on pyramidal neurones, particularly the superficial layer pyramids, are in general not due to monosynaptic input from thalamus, but polysynaptic input from cortical pyramids. Since the thalamic input is transient it does not provide the major, sustained excitation arriving at any cortical neurone. Instead the intracortical excitatory connections provide the major component of the excitation. 4. The polysynaptic excitatory response would be sustained well after the stimulus, were it not for the suppressive effect of intracortical inhibition induced by the pulse stimulation. 5. Intracellular recording combined with ionophoresis of gamma-aminobutyric acid (GABA) agonists and antagonists showed that intracortical inhibition is mediated by GABAA and GABAB receptors. The GABAA component occurs in the early phase of the impulse response. It is reflected in the strong hyperpolarization that follows the excitatory response and lasts about 50 ms. The GABAB component occurs in the late phase of the response, and is reflected in a sustained hyperpolarization that lasts some 200-300 ms. Both components are seen in all cortical pyramidal neurones. However, the GABAA component appears more powerful in deep layer pyramids than superficial layer pyramids. 6. The microcircuit simulates with good fidelity the above data from experiments in vivo and provides a novel explantation for the apparent lack of significant inhibition during visual stimulation. The basic circuit may be common to all cortical areas studied and thus the microcircuit may be a 'canonical' microcircuit for neocortex.