A comprehensive review of the literature on the anatomy, electrophysiology and pharmacology of the substantia nigra is presented. A diagram is developed taking into account the interneuronal interactions of neurotransmitters and receptors that control firing rates and neurotransmitter releases. The central features of the diagram are a positive dopaminergic feedforward process and a positive feedback mechanism mediated by extrasynaptic substance P diffusing from striatal terminals to dopaminergic dendrites of the zona compacta neurons. This loop can enhance the transmission of information from the striatum through the pars reticulata output neurons. The loop is controlled at the level of zona compacta neurons by a negative feedback supported by the dendritic release of dopamine and boosted by pedunculopontine activation mediated by muscarinic receptors. The output of the loop is controlled by two negative feedforward processes, both involving GABAergic striatonigral afferents. Application of the model to pharmacological studies of diverse behaviors including seizures, turning, and conditioned behaviors reveals unforseen relationships and may offer insights into, and directions for, further analysis of the mechanisms and functions involved.