1. (1) In transverse hippocampal slices (350 μm thick), taken from guinea pigs initially anaesthetized with ether, intracortical afferent fibres were activated by small current pulses delivered through tungsten microelectrodes. Extracellular potentials were recorded from the zone of activated fibres in dendritic layers while intracellular recordings were made from the soma of CA1 pyramidal cells. 2. (2) When recording was made from the same level as the stimulating cathode, the extracellular potential consisted of a diphasic deflection followed by a larger negative wave with a superimposed population spike. The negative wave corresponded to an intracellularly recorded EPSP, and is called an extracellular EPSP, whereas the initial diphasic deflection had no intracellular counterpart. 3. (3) The initial diphasic deflection was linearly related to the size of both the intracellular and extracellular EPSP. It was not changed by removal of calcium ions from the bathing fluid, whereas all postsynaptic activity disappeared. The diphasic deflection was propagated along fibres lying parallel to the pyramidal layer with a velocity of 0.3 m/sec. It could follow short bursts of stimulation at 300 Hz. The absolute refractory period was 2.0 msec. 4. (4) The initial diphasic deflection is interpreted as the compound action potential of the largely unmyelinated afferent fibres to the CA1 neurones. © 1978.