Deep brain stimulation (DBS) is an effective therapy for medically refractory movement disorders. However, fundamental questions remain about the effects of DBS on neurons surrounding the electrode. Experimental studies have produced apparently contradictory results showing suppression of activity in the stimulated nucleus, but increased inputs to projection nuclei. We hypothesized that cell body firing does not accurately reflect the efferent output of neurons stimulated with high-frequency extracellular pulses, and that this decoupling of somatic and axonal activity explains the paradoxical experimental results. We studied stimulation using the combination of a finite-element model of the clinical DBS electrode and a multicompartment cable model of a thalamocortical (TC) relay neuron. Both the electric potentials generated by the electrode and a distribution of excitatory and inhibitory trans-synaptic inputs induced by stimulation of presynaptic terminals were applied to the TC relay neuron. The response of the neuron to DBS was primarily dependent on the position and orientation of the axon with respect to the electrode and the stimulation parameters. Stimulation subthreshold for direct activation of TC relay neurons caused suppression of intrinsic firing (tonic or burst) activity during the stimulus train mediated by activation of presynaptic terminals. Suprathreshold stimulation caused suppression of intrinsic firing in the soma, but generated efferent output at the stimulus frequency in the axon. This independence of firing in the cell body and axon resolves the apparently contradictory experimental results on the effects of DBS. In turn, the results of this study support the hypothesis of stimulation-induced modulation of pathological network activity as a therapeutic mechanism of DBS.