1. In the Necturus retina, light-evoked field potentials, Müller (glial) cell responses, and extracellular potassium ion concentration ([K+]0) were recorded and found to exhibit the three-way correlation characteristic of these variables elsewhere in the nervous system. 2. Müller cell responses to a flashed spot or annulus consist primarily of slow depolarizations at both light onset and offset. The responses are maximum to 0.5-mm-diameter spots and decrease with larger diameters. Responses to stimulus intensity and flicker were also used to characterize Müller cell behavior. 3. In response to long-duration stimuli, the initial Müller cell depolarization is followed by a very slow hyperpolarization, which is likely the origin of slow PIII. 4. A new extracellular potential is described, the M-wave, the basic properties of which suggest that it is generated by Müller cells. Moreover, the M-wave and Müller cells show remarkably similar behavior to a wide variety of stimulus parameters. 5. In the proximal retina, [K+]0 increases at both light onset and offset with a time course similar to that of Müller cell depolarizing responses. This K+ increase also behaves similarly to the Müller cell depolarization in response to changes in stimulus parameters. 6. It is concluded that light stimulation leads to an increase in [K+]0 in the proximal retina and that this increase depolarizes Müller cells whose associated currents, in turn, generate the M-wave.