The effect of opiate peptide administration on the electrical activity of intraocular hippocampal transplants was studied. Similar to observations in situ, the administration of beta-endorphin or methionine enkephalin produces a concentration-dependent increase in the firing rate of identified pyramidal neurons within hippocampal formation transplants. In addition, these peptides elicit a profound increase in 'EEG' amplitude, which ultimately develops into epileptiform activity. The ability of naloxone to either reverse or prevent the peptide-induced changes in both single unit and EEG activity supports the hypothesis that the excitatory response of the hippocampus to opioid peptides is mediated via an opiate receptor. The results of this study also suggest that the excitatory response to the opiate peptides in hippocampus is the result of alterations in intrinsic neuronal circuitry and is not dependent upon extra-hippocampal afferents.