The intracellular response of the ocellar nerve dendrite, the second order neuron in the retina of the dragonfly ocellus, has been modified by application of various drugs and a model developed to explain certain features of that response. Curare blocked the response completely. Both picrotoxin and bicuculline eliminated the "off" overshoot. Bicuculline also decreased the size of response and the sensitivity. gamma-Aminobutyric acid (GABA), however, increased the size of response. The evidence indicates the possibility that the receptor transmitter is acetylcholine and is inhibitory to the ocellar nerve dendrite whereas the feedback transmitter from the ocellar nerve dendrite may be GABA and is facilitory to receptor transmitter release. The model of synaptic feedback interaction developed to be consistent with these results has certain important features. It suggests that the feedback transmitter is released in the dark to increase input sensitivity from receptors in response to dim light. This implies that the dark potential of the ocellar nerve dendrite may be determined by a dynamic equilibrium established by synaptic interaction between it and the receptor terminals. Such a system is also well suited to signalling phasic information about changes in level of illumination over a wide range of intensities, a characteristic which appears to be a significant feature of the dragonfly median ocellar response.