Neocortical action potential responses in vivo are characterized by considerable threshold variability, and thus timing and rate variability, even under seemingly identical conditions. This finding suggests that cortical ensembles are required for accurate sensorimotor integration and processing. Intracellularly, trial-to-trial variability results not only from variation in synaptic activities, but also in the transformation of these into patterns of action potentials. Through simultaneous axonal and somatic recordings and computational simulations, we demonstrate that the initiation of action potentials in the axon initial segment followed by backpropagation of these spikes throughout the neuron results in a distortion of the relationship between the timing of synaptic and action potential events. In addition, this backpropagation also results in an unusually high rate of rise of membrane potential at the foot of the action potential. The distortion of the relationship between the amplitude time course of synaptic inputs and action potential output caused by spike backpropagation results in the appearance of high spike threshold variability at the level of the soma. At the point of spike initiation, the axon initial segment, threshold variability is considerably less. Our results indicate that spike generation in cortical neurons is largely as expected by Hodgkin-Huxley theory and is more precise than previously thought.