We investigate the effects of synaptic transmission on early visual processing by examining the passage of signals from photoreceptors to second order neurons (LMCS). We concentrate on the roles played by three properties of synaptic transmission: (1) the shape of the characteristic curve, relating pre- and postsynaptic signal amplitudes, (2) the dynamics of synaptic transmission and (3) the noise introduced during transmission. The characteristic curve is sigmoidal and follows a simple model of synaptic transmission (Appendix) in which transmitter release rises exponentially with presynaptic potential. According to this model a presynaptic depolarization of 1.50-1.86 mV produces an e-fold increase in postsynaptic conductance. The characteristic curve generates a sigmoidal relation between postsynaptic (LMC) response amplitude and stimulus contrast. The shape and slope of the characteristic curve is unaffected by the state of light adaptation. Retinal antagonism adjusts the characteristic curve to keep it centred on the mean level of receptor response generated by the background. Thus the photoreceptor synapses operate in the mid-region of the curve, where the slope or gain is highest and equals approximately 6. The dynamics of transmission of a signal from photoreceptor to second-order neuron approximates to the sum of two processes with exponential time courses. A momentary receptor depolarization generates a postsynaptic hyperpolarization of time constant 0.5-1.0 ms, followed by a slower and weaker depolarization. Light adaptation increases the relative amplitude of the depolarizing process and reduces its time constant from 80 ms to 1.5 ms. The hyperpolarizing process is too rapid to bandlimit receptor signals. The noise introduced during the passage of the signal from receptor to second-order neuron is measured by comparing signal:noise ratios and noise power spectra in the two cell types. Under daylight conditions from 50 to 70% of the total noise power is generated by events associated with the transmission of photoreceptor signals and the generation of LMC responses. According to the exponential model of transmitter release, the effects of synaptic noise are minimized when synaptic gain is maximized. Moreover, both retinal antagonism and the sigmoidal shape of the characteristic curve promote synaptic gain. We conclude that retinal antagonism and nonlinear synaptic amplification act in concert to protect receptor signals from contamination by synaptic noise. This action may explain the widespread occurrence of these processes in early visual processing.