Nerve excitation generates heat and decreases the entropy (review by Ritchie and Keynes (1985) Q. Rev. Biophys. 18, 451-476). The data suggest the existence of at least two thermodynamically identifiable states: resting and excited, with a thermotropic transition between the two. We envision that nerve excitation is a transition between the two states of the excitation machinery consisting of proteins and lipids, rather than the sodium channel protein alone. Presumably, both proteins and lipids change their conformation at excitation. We proposed (Kaminoh et al. (1991) Ann. N.Y. Acad. Sci. 625, 315-317) that anesthesia occurs when compounds have a higher affinity to the resting state than to the excited state of excitable membranes, and that there is a critical temperature above which the affinity to the excited state becomes greater than to the resting state. When the temperature exceeds this critical level, compounds lose their anesthetic potency. We used thermotropic phase-transition of macromolecules as a model for the excitation process. Anesthetic alcohols decreased the main transition temperature of dipalmitoylphosphatidylcholine (DPPC) membranes and also the temperature of the alpha-helix to beta-sheet transition of poly(L-lysine). The affinity of alcohols to the high- and low-temperature states of the DPPC membranes were separately estimated. The difference in the affinity of n-alcohols to the liquid (high-temperature) and solid (low-temperature) states correlated with their anesthetic potency. It is not the total number of bound anesthetic molecules that determines thc anesthesia, rather, the difference in the affinity between the higher and lower entropy states determines the effects. The critical temperatures of the long-chain alcohols were found to be lower than those of the short-chain alcohols. Cutoff occurs when the critical temperature of long-chain alcohols is below the physiological temperature, such that the anesthetic potency is not manifested in the experimental temperature range.