A new method is described for the recording and discrimination of extracellular action potentials in CNS regions with high cellular packing density or where there is intrinsic variation in action potential amplitude during burst discharge. The method is based on the principle that cells with different ratios of distances from two electrode tips will have different spike-amplitude ratios when recorded on two channels. The two channel amplitude ratio will remain constant regardless of intrinsic variation in the absolute amplitude of the signals. The method has been applied to the rat hippocampal formation, from which up to 5 units have been simultaneously isolated. The construction of the electrodes is simple, relatively fast, and reliable, and their low tip impedances result in excellent signal to noise characteristics.