Over the past decade, a growing body of evidence has emerged on the existence in the brain of a close bidirectional communication system between neurones and astrocytes. This article reviews recent advances in understanding the rules governing these interactions and describes putative, novel functions attributable to astrocytes in neuronal transmission. Astrocytes can respond to the neurotransmitter released from active synaptic terminals, with cytosolic Ca(2+) oscillations whose frequency is under the dynamic control of neuronal activity. In response to these neuronal signals, astrocytes can signal back to neurones by releasing various neurone active compounds, such as the excitatory neurotransmitter glutamate. Interestingly, there is accumulating evidence that glutamate is released via a Ca(2+)-dependent mechanism which may share common properties with neurotransmitter exocytosis in neurones. This bidirectional communication system between neurones and astrocytes may lead to profound changes in neuronal excitability and synaptic transmission. While there clearly is an enormous amount of experimental and theoretical work yet to figure out, a coherent view is now emerging which incorporates the astrocyte, with the presynaptic terminal and the postsynaptic target neurone, as a possible third functional element of the synapse.