Two morphologically distinct types of horizontal cell have been identified in the all-rod skate retina by light- and electron-microscopy as well as after isolation by enzymatic dissociation. The external horizontal cell is more distally positioned in the retina and has a much larger cell body than does the internal horizontal cell. However, both external and internal horizontal cells extend processes to the photoreceptor terminals where they end as lateral elements adjacent to the synaptic ribbons within the terminal invaginations. Whole-cell voltage-clamp studies on isolated cells similar in appearance to those seen in situ showed that both types displayed five separate voltage-sensitive conductances: a TTX-sensitive sodium conductance, a calcium current, and three potassium-mediated conductances (an anomalous rectifier, a transient outward current resembling an A current, and a delayed rectifier). There was, however, a striking difference between external and internal horizontal cells in the magnitude of the current carried by the anomalous rectifier. Even after compensating for differences in the surface areas of the two cell types, the sustained inward current elicited by hyperpolarizing voltage steps was a significantly greater component of the current profile of external horizontal cells. A difference between external and internal horizontal cells was seen also in the magnitudes of their TEA-sensitive currents; larger currents were usually obtained in recordings from internal horizontal cells. However, the currents through these K+ channels were quite small, the TEA block was often judged to be incomplete, and except for depolarizing potentials greater than or equal to +20 mV (i.e., outside the normal operating range of horizontal cells), this current did not provide a reliable indicator of cell type. The fact that two classes of horizontal cell can be distinguished by their electrophysiological responses, as well as by their morphological appearance and spatial distribution in the retina, suggests that they may play different roles in the processing of visual information within the retina.