We examined the role of Müller (glial) cells in buffering light-evoked changes in extracellular K+ concentration, [K+]o, in the isolated retina of the toad, Bufo marinus. We found evidence for two opposing Müller cell current loops that are generated by a light-evoked increase in [K+]o in the inner plexiform layer. These current loops, which are involved in the generation of the M-wave of the electroretinogram (ERG), prevent the accumulation of K+ in the inner plexiform layer by transporting K+ both to vitreous and to distal retina. In addition, under dark-adapted conditions, we found evidence for a Müller cell current loop that is generated by a light-evoked decrease in [K+]o in the receptor layer. This current loop, which is involved in the generation of the slow PIII component of the ERG, helps to buffer the light-evoked decrease in [K+]o throughout distal retina by transporting K+ from vitreous. The spatial buffering fluxes of K+ can be abolished by blocking Müller cell K+ conductance with 200 microM Ba2+. The separate contributions of the M-wave and slow PIII currents to Müller cell spatial buffering were isolated by various pharmacological treatments that were designed to enhance or suppress light-evoked activity in specific retinal neurons. Our results show that Müller cell K+ currents not only buffer light-evoked increases in [K+]o, but also buffer light-evoked decreases in [K+]o, and thereby diminish any deleterious effects upon neuronal function that could arise in response to large changes in [K+]o in the plexiform layers. Moreover, our results emphasize that spatial buffering currents generate many components of the electroretinogram.