The site of origin and mechanism underlying the generation of repetitive after-discharges produced by penicillin was studied in the isolated rat phrenic nerve-hemidiaphragm preparation. Application of low concentrations of sodium penicillin to the bathing solution initiated bursts of antidromic action potentials originating at or near the motor nerve terminals following single orthodromic stimuli to the nerve. Afterdischarges could not be elicited by direct stimulation of the muscle fibers alone, or when the nerve trunk was isolated from the neuromuscular junction and exposed to penicillin. D-Tubocurarine applied in doses sufficient to abolish postsynaptic responses did not diminish penicillin-induced after discharges. At concentrations which most reliably produced repetitive firing (5000 IU/ml; 8.5 mM), penicillin did not accelerate the frequency of spontaneous transmitter release (MEPPs), yet significantly increased the relative excitability of nerve endings to extracellular stimulation. It is concluded that penicillin acts directly and preferentially on presynaptic nerve terminals to induce repetitive afterdischarges which arise independently of postsynaptic depolarization, transmitter-mediated potassium efflux, or muscle fiber contraction. The results suggest that the convulsant effects of penicillin at a mammalian neuromuscular junction are due to non-depolarizing alterations in the intrinsic excitability of the terminal membrane which increase the probability of suprathreshold depolarizations during the recovery period of spike electrogenesis. Several models of the mechanisms which might produce hyperexcitability at presynaptic nerve terminals are discussed.