Glass micropipettes are widely used to record neural activity from single neurons or clusters of neurons extracellularly in live animals. However, to date, there has been no comprehensive study of noise in extracellular recordings with glass micropipettes. The purpose of this work was to assess various noise sources that affect extracellular recordings and to create model systems in which novel micropipette neural amplifier designs can be tested. An equivalent circuit of the glass micropipette and the noise model of this circuit, which accurately describe the various noise sources involved in extracellular recordings, have been developed. Measurement schemes using dead brain tissue as well as extracellular recordings from neurons in the inferior colliculus, an auditory brain nucleus of an anesthetized gerbil, were used to characterize noise performance and amplification efficacy of the proposed micropipette neural amplifier. According to our model, the major noise sources which influence the signal to noise ratio are the intrinsic noise of the neural amplifier and the thermal noise from distributed pipette resistance. These two types of noise were calculated and measured and were shown to be the dominating sources of background noise for in vivo experiments.