Experiments were performed in the superfused retina-eyecup of mudpuppies using intracellular electrophysiological techniques to evaluate the effects of serine on amacrine and ganglion cells. Serine was found to have a dose-dependent inhibitory effect mediated by the opening of chloride channels. Serine appears to act on a glycine receptor based on the observations that: (1) serine's effect is blocked by strychnine but not by bicuculline or picrotoxin, (2) in the presence of saturating glycine concentrations serine had no effect on membrane voltage or conductance, (3) cells inhibited by serine were always sensitive to glycine, but not always sensitive to GABA. High pressure liquid chromatography measurements disclose that there is a high concentration of extracellular serine in the retina. The data indicate that serine could act as an inhibitory neurotransmitter.