Intracellular studies from photoreceptors and second order neurons in the dragonfly ocellar retina suggest that the hyperpolarizing OFF oscillation in the photoreceptor reflects synaptic feedback from second order neurons onto receptor terminals. The receptor OFF response was normally observed when recording more proximally, closer to the nuclear and synaptic region, but it was not seen when recording more distally, closer to the rhabdomeric end of the cell. Both the hyperpolarizing OFF response in the receptor and the depolarizing OFF response in the second order cell are apparently generated in the ocellar plexiform layer because they were not eliminated when the second order processes were isolated from the brain. In both intact and cut nerve preparations, the receptor OFF response was blocked by curare and enhanced by picrotoxin, the same drugs that were reported to selectively modify the response of the second order cell. In addition, a normal-appearing OFF response was recorded intracellularly from the dark-adapted photoreceptor in response to the application of brief hyperpolarizing current pulses to the ocellar nerve. These results support a model of sign-conserving feedback from second order neurons onto receptor terminals and are consistent with the hypothesis that the receptor transmitter may be acetylcholine and the feedback transmitter could be GABA.