Much interest has recently centred on the properties of peptides that modulate the excitability of nerve cells. Such compounds include the undecapeptide substance P, which is particularly well established as an excitatory neurotransmitter, and we examine here its effects on magnocellular cholinergic neurones taken from the medial and ventral aspects of the globus pallidus of newborn rats and grown in dissociated culture. These neurones have previously been shown to respond to substance P3 and are analogous to the nucleus basalis of Meynert in man, which gives a diffuse projection to the cerebral cortex and whose degeneration is the likely cause of Alzheimer's disease. Substance P depolarizes these cultured neurones by reducing an inwardly rectifying potassium conductances; this conductance has been found in several neuronal types and has similar properties to those of certain other cells. As discussed below, modulation of inward (or anomalous) rectification by substance P implies a self-reinforcing element to the depolarization caused by the peptide.