Capsaicin activates a non-specific cation conductance in mammalian sensory neurones. If capsaicin is applied continuously or repeatedly then there is a progressive decline in responsiveness. We have studied the mechanism of this desensitization using electrophysiological methods in cultured dorsal root ganglion neurones from adult rats. The rate of desensitization of capsaicin-induced responses is partly dependent on the extracellular calcium concentration and is slower when extracellular calcium is reduced. Desensitization is strongly inhibited by intracellular application of the calcium chelator 1,2-bis(2-aminophenoxy)ethane-N, N, N',N'-tetraacetic acid (BAPTA). These data suggest that desensitization is due to a rapid rise in intracellular calcium levels which occurs when capsaicin-sensitive ion channels are activated. Desensitization is not reduced by the non-specific protein kinase inhibitors H7 or staurosporine or by okadaic acid, a selective inhibitor of protein phosphatases 1 and 2A. Desensitization is greatly reduced by cyclosporin A complexed to cyclophilin, which is a specific inhibitor of protein phoshatase 2B (calcineurin). A mechanism for desensitization of capsaicin responsiveness is proposed whereby the evoked rise in calcium activates calcineurin leading to dephosphorylation and desensitization of the capsaicin-sensitive ion channels.