1. The activation of GABAA receptors in nerve terminal membranes gates a Cl- channel. Experiments were conducted to determine how the activation of this receptor influences membrane potentials, action potentials and voltage-activated Na+ and K+ channels. 2. When activation of the GABAA receptor produced only conductance changes and no voltage changes, action potentials changed only slightly. The threshold for action potential generation increased by 15%. GABA reduced the broadening of action potentials caused by high frequency stimulation by only 7%. These results indicate that membrane shunting by GABA-gated Cl- channels plays a relatively minor role. 3. By recording changes in the current through K+ channels in cell-attached patches, the activation of GABAA receptors was shown to depolarize the nerve terminal membrane from rest by 14 mV. The GABAB receptor agonist baclofen produced no change in resting membrane potential as measured by this same technique. 4. In whole-terminal recordings under current clamp, with pipettes containing various Cl- concentrations, the GABA-induced depolarization increased with Ecl. The variation with Ecl provided a basis for evaluating the contributions of leak and K+ current in the balance of currents that determines the magnitude of the GABA-induced depolarization. 5. Based on the GABA-induced voltage change and an evaluation of the other currents of significance in the relevant voltage range, an estimate was obtained for ECl of -48 mV to give an estimate for the intracellular Cl- ion concentration of 20 mM. 6. Under conditions allowing both conductance and voltage to change during Cl- channel gating, GABA prevented action potential responses to current injection. Comparable depolarizations produced by adjusting a steady holding current also blocked action potential responses. 7. A depolarization from -60 to -45 mV under voltage clamp inactivated approximately 90% of the Na+ channels and activated a small amount of K+ current. This suggests that inactivation of Na+ channels makes a major contribution to the inhibition of action potentials by GABA. 8. These results are consistent with the hypothesis that GABA inhibits neurosecretion by retarding impulse propagation into the terminal arborization. These results support a depolarization block mechanism for the inhibition of secretion, in which depolarization inactivates Na+ channels sufficiently to block action potentials.