1. Intracellular recording from cat Betz cells in vitro revealed a strong correlation between the dominant effect of serotonin (5-HT) and the Betz cell subtype in which it occurred. In large Betz cells that show posthyperpolarization excitation (termed PHE cells), 5-HT evoked a long-lasting membrane depolarization, whereas 5-HT evoked an initial hyperpolarization of variable duration in smaller Betz cells that show posthyperpolorization inhibition (termed PHI cells). 2. Voltage-clamp studies revealed that 5-HT caused a depolarizing shift of activation of the cation current Ih, which resulted in the depolarization in PHE cells, whereas the hyperpolarization in PHI cells is caused by an increase in a resting potassium conductance. 3. The effect of 5-HT on firing properties during constant current stimulation also differed consistently in the two types of Betz cells. In PHE cells the initial firing rate increased after 5-HT application, but the steady firing was unaffected. The depolarizing shift of Ih activation caused the increase of initial firing rate. 4. In PHI cells 5-HT caused a decrease in spike frequency adaptation. The decrease in adaptation was caused by a combination of two conductance changes. First, 5-HT caused a slow afterdepolarization in PHI cells that could trigger repetitive firing in the absence of further stimulation. The sADP depended on calcium entry through voltage-gated channels and was associated with a decrease in membrane conductance. Second, 5-HT caused reduction of a slow calcium-dependent potassium current that normally contributes to slow adaptation. 5. In conclusion, the effect of 5-HT on excitability differs systematically in Betz cell subtypes in part because they have different dominant ionic mechanisms that are modulated. If we assume that PHE cells and PHI cells represent fast and slow pyramidal tract (PT) neurons respectively, 5-HT will cause early recruitment of fast PT cells and delay recruitment of slow PT cells during low levels of synaptic excitation.