Brief electrical or hormonal stimulation of the bag cell neurons of Aplysia triggers a long-lasting discharge during which alpha bag cell peptide (alpha-BCP) and other neuropeptides are released from the cells. We have carried out experiments, using both intact abdominal ganglia and isolated neurons, demonstrating that alpha-BCP acts directly on the bag cell neurons to influence cAMP levels and voltage-dependent potassium currents. Exposure of the bag cell neurons within intact ganglia to alpha-BCP, at concentrations greater than 1 nM, inhibited an ongoing discharge. alpha-BCP also significantly reduced both basal and forskolin-stimulated levels of cAMP in bag cell clusters. The inhibition of the discharge by alpha-BCP could be prevented and reversed by pharmacological elevation of intracellular cAMP levels. Immunohistochemical staining of neurons maintained in cell culture showed that all isolated bag cell neurons exhibit immunoreactivity with antisera against alpha-BCP. Application of the adenylate cyclase activator forskolin to such isolated cells, in the presence of a phosphodiesterase inhibitor, attenuates the amplitude of the delayed voltage-dependent outward currents measured in voltage-clamp experiments. Pretreatment of the cells with alpha-BCP significantly reduced the ability of forskolin to attenuate these currents, demonstrating that alpha-BCP acts directly at autoreceptors on bag cell neurons. Experiments with the isolated cells showed that a second autoreceptor-mediated effect of alpha-BCP was the enhancement of an inwardly rectifying potassium current that was activated at potentials more negative than -40 mV. The reversal potential and conductance of the current induced by alpha-BCP were dependent on the external K+ concentration. This response to alpha-BCP could be blocked by rubidium, cesium, and barium ions. Our data demonstrate that alpha-BCP can exert inhibitory biochemical and electrophysiological actions on the bag cell neurons that release it and suggest that autoreceptors for alpha-BCP play an important role in the termination of a discharge in the bag cell neurons.