The mechanisms that underlie synaptic plasticity have been largely inferred from electrophysiological studies performed at sites remote from synaptic terminals. Thus the mechanisms involved in plasticity at the secretory sites have remained ill-defined. We have now used somatic synapses of cultured Helisoma neurones to directly assess presynaptic ion conductances and study the secretory apparatus. At these synapses we determined the actions of a modulatory neuropeptide, Phe-Met-Arg-Phe-NH2 (FMRFa), on the release of the neurotransmitter acetylcholine (ACh). Using voltage- and calcium-clamp techniques, we have demonstrated that FMRFa causes a presynaptic inhibition of ACh release by (1) reducing the magnitude of the voltage-dependent calcium current, and (2) regulating the secretory apparatus. The photolabile calcium cage, nitr-5 (refs 3-8), was dialysed into the presynaptic cell. In response to ultraviolet light, calcium was released from nitr-5 and ACh secretion was stimulated. Under conditions of constant internal calcium, FMRFa reduced the rate of ACh release. Thus we conclude that FMRFa reduces the influx of calcium during the action potential and decreases the sensitivity of the secretory apparatus to elevated internal calcium, thereby contributing to a presynaptic inhibition of transmitter release.