1. The effect of presynaptic, axoaxonal inhibition, that exerts its action by producing a local conductance increase, on the behavior of action potentials at postsynaptic axon terminals is analyzed computationally. The significance of the location and strength of the presynaptic inhibition, as well as the morphology and membrane properties of the axonal terminals, are considered. 2. Keeping the specific properties of terminal membrane and axoplasm constant, the critical "silent" steady-state conductance change (gcrit) that blocks propagation is linearly scaled with the terminal diameter raised to the 3/2 power. At the midpoint of a 5 lambda long, 1 micron diameter axon that has the standard Hodgkin and Huxley (1952) kinetics at 18 degrees C (and an input conductance of 8.7 nS), gcrit is 72 nS. At 0 degrees C, gcrit = 200 nS, whereas at 30 degrees C gcrit = 30 nS. 3. The critical conductance change that blocks propagation depends steeply on the density of excitable channels (gNa) at the terminal. For a geometrically uniform terminal at 18 degrees C, the action potential can not be blocked by a local shunt when gNa greater than 600 mS/cm2. 4. An axoaxonal synapse in the proximity of the postsynaptic release site has graded control over the spike amplitude (and, therefore, over the postsynaptic output) at that site. Presynaptic inhibition located remotely from the release site has an all-or-none effect at the release site. 5. Inhibition is more effective in attenuating the spike at the terminal when it impinges onto a passive terminal rather than on an excitable one. 6. The detectability of the conductance increase as well as the change in action potential amplitude associated with the presynaptic inhibition is poor at only a short distance from the axoaxonal synapse. The presence of bottlenecks and varicosities at some axonal terminals enhances this decoupling effect even more. Thus presynaptic inhibition may reduce the potential near the output site of the affected axon significantly, without producing any noticeable conductance or voltage change at a distance of only several tens of micrometers (a few tenths of a space constant) away from it. 7. Varicosities and bottlenecks typically found along axonal terminals are the optimal loci for presynaptic inhibition to be most effective in attenuating the action potential at the terminal. Even with high density of excitable channels, propagation with such terminal geometry is insecure, and one, or few, quanta of inhibitory transmitter (a conductance change of several nanosiemens) can block propagation there.(ABSTRACT TRUNCATED AT 400 WORDS)