1. Intracellular recordings of cone and horizontal cell responses to circles or annuli of light were made with the purpose of determining the properties of and the mechanisms underlying the horizontal-cell-mediated depolarization of cones which is evoked by surround illumination.2. A comparison of the responses of a cone and a near-by horizontal cell to a peripheral stimulus revealed a striking similarity in their time courses and amplitudes, indicating that a correlation exists between the depolarizing synaptic potential in the cone and the response of the horizontal cell.3. The depolarizing synaptic potential in cones was separated from the direct response of the cell to light by illuminating the periphery with an annulus during steady, bright illumination of the central cone. The synaptic potentials were graded with the intensity or area of peripheral illumination. In some cones a spike-like depolarization, which overshot the dark resting potential, occurred with bright illumination of the periphery.4. The effects of extrinsic current on the synaptic potential demonstrated that this response was generated by a change in membrane conductance consisting of two separate components with different time-dependences and reversal levels. The slower of the two components, which often outlasts the stimulus, represents an increase in membrane conductance.5. The progressive decline in the amplitude of the responses of horizontal cells under a large spot from centre to periphery was found to result in a diminished feed-back effect in cones near the edge of the spot. This leads to a Mach-band effect during the plateau phase of cone responses, suggesting that one function of the feed-back might be to enhance contrast discrimination.