Cocaine and other local anesthetics produce a characteristic form of electrical activity in the olfactory forebrain consisting of bursts of sinusoidal potentials (spindles) in the range of 20-50 c/sec. The purpose of the present experiment was to determine if this drug-induced spindle activity is generated by the same neuronal elements in the olfactory bulb (OB) and prepyriform cortex (PPC) which generate naturally occurring olfactory spindles. Rats with chronically implanted electrodes in the OB and PPC were injected with doses of cocaine or lidocaine hydrochloride sufficient to produce spindles (5 mg/kg i.v. or 40 mg/kg i.p.). Drug-induced and naturally occurring spindles exhibited similar anterior-posterior amplitude profiles, with the highest amplitude in the OB and the lowest in the posterior PPC. Multipolar recordings from the PPC indicated that the amplitude of naturally occurring and drug-induced spindles was highest at sites near the superficial pyramidal cell layer of the PPC and lower at sites 1-2 mm more dorsal. Furthermore, both naturally occurring and drug-induced spindles exhibited a polarity reversal near the superficial pyramidal cell layer of the PPC and the mitral cell layer of the OB. Finally, neither form of spindle occurred when nasal air flow (olfactory stimulation) was prevented. These observations suggest that cocaine- and lidocaine-induced spindles are generated in the OB and PPC by the same neuronal elements which also produce naturally occurring olfactory spindles.