Tetanus toxin reduces monosynaptic inhibitory and excitatory synaptic transmission in mouse spinal cord neurons in culture. Inhibitory transmission is preferentially reduced by the toxin; however, excitatory transmission is also ultimately reduced and blocked by the concentrations of toxin used in these studies. Recordings from monosynaptically connected cell pairs revealed a marked diminution in amplitude of evoked monosynaptic inhibitory postsynaptic potentials coincident with the onset of convulsant action at a time when evoked monosynaptic EPSPs were relatively unaffected. Increased polysynaptic excitation occurred as a result of diminished inhibition. This supports the reduction of inhibition as an important mechanism in the convulsant action of tetanus toxin. Quantal analysis of the late effects of tetanus toxin on the monosynaptic excitatory postsynaptic potential revealed a reduction in quantal number with no reduction in quantal size, thus demonstrating a presynaptic locus of action for the toxin on spinal neurons.