Electrophysiological correlates of locus coeruleus-induced growth stimulation in rat cortical grafts homologously transplanted to the anterior chamber of the eye were studied. Neurons in growth-stimulated grafts manifested a slow sustained spontaneous discharge similar to that found in rat cortex in situ. Local administration of glutamate markedly augmented this discharge. In contrast, neurons from nonstimulated grafts fired in high frequency bursts separated by long pauses, and this discharge was comparatively insensitive to glutamate. Poststimulus inhibition after local stimulation of the transplant surface was readily observed in the growth-stimulated grafts, but absent in all non-stimulated grafts tested. Moreover, superfusion of picrotoxin, which antagonizes GABA-mediated inhibitory pathways, reversibly converted the growth-stimulated graft discharge pattern into one characteristic of non-stimulated grafts. Taken together with the data in the preceding paper, the results demonstrate the importance of extrinsic inputs for functional development of neuronal circuits within neocortex.