We investigate the heterogeneity of electrical conductivity as a new mechanism to stimulate excitable tissues via applied electric fields. In particular, we show that stimulation of axons crossing internal boundaries can occur at boundaries where the electric conductivity of the volume conductor changes abruptly. The effectiveness of this and other stimulation mechanisms was compared by means of models and computer simulations in the context of transcranial magnetic stimulation. While, for a given stimulation intensity, the largest membrane depolarization occurred where an axon terminates or bends sharply in a high electric field region, a slightly smaller membrane depolarization, still sufficient to generate action potentials, also occurred at an internal boundary where the conductivity jumped from 0.143 S m(-1) to 0.333 S m(-1), simulating a white-matter-grey-matter interface. Tissue heterogeneity can also give rise to local electric field gradients that are considerably stronger and more focal than those impressed by the stimulation coil and that can affect the membrane potential, albeit to a lesser extent than the two mechanisms mentioned above. Tissue heterogeneity may play an important role in electric and magnetic 'far-field' stimulation.