The present investigation continues a previous study in which the soma-dendrite system of sensory neurons was excited by stretch deformation of the peripheral dendrite portions. Recording was done with intracellular leads which were inserted into the cell soma while the neuron was activated orthodromically or antidromically. The analysis was also extended to axon conduction. Crayfish, Procambarus alleni (Faxon) and Orconectes virilis (Hagen), were used. 1. The size and time course of action potentials recorded from the soma-dendrite complex vary greatly with the level of the cell's membrane potential. The latter can be changed over a wide range by stretch deformation which sets up a "generator potential" in the distal portions of the dendrites. If a cell is at its resting unstretched equilibrium potential, antidromic stimulation through the axon causes an impulse which normally overshoots the resting potential and decays into an afternegativity of 15 to 20 msec. duration. The postspike negativity is not followed by an appreciable hyperpolarization (positive) phase. If the membrane potential is reduced to a new steady level a postspike positivity appears and increases linearly over a depolarization range of 12 to 20 mv. in various cells. At those levels the firing threshold of the cell for orthodromic discharges is generally reached. 2. The safety factor for conduction between axon and cell soma is reduced under three unrelated conditions, (a) During the recovery period (2 to 3 msec.) immediately following an impulse which has conducted fully over the cell soma, a second impulse may be delayed, may invade the soma partially, or may be blocked completely. (b) If progressive depolarization is produced by stretch, it leads to a reduction of impulse height and eventually to complete block of antidromic soma invasion, resembling cathodal block, (c) In some cells, when the normal membrane potential is within several millivolts of the relaxed resting state, an antidromic impulse may be blocked and may set up within the soma a local potential only. The local potential can sum with a second one or it may sum with potential changes set up in the dendrites, leading to complete invasion of the soma. Such antidromic invasion block can always be relieved by appropriate stretch which shifts the membrane potential out of the "blocking range" nearer to the soma firing level. During the afterpositivity of an impulse in a stretched cell the membrane potential may fall below or near the blocking range. During that period another impulse may be delayed or blocked. 3. Information regarding activity and conduction in dendrites has been obtained indirectly, mainly by analyzing the generator action under various conditions of stretch. The following conclusions have been reached: The large dendrite branches have similar properties to the cell body from which they arise and carry the same kind of impulses. In the finer distal filaments of even lightly depolarized dendrites, however, no axon type all-or-none conduction occurs since the generator potential persists to a varying degree during antidromic invasion of the cell. With the membrane potential at its resting level the dendrite terminals contribute to the prolonged impulse afternegativity of the soma. 4. Action potentials in impaled axons and in cell bodies have been compared. It is thought that normally the over-all duration of axon impulses is shorter. Local activity during reduction of the safety margin for conduction was studied. 5. An analysis was made of high frequency grouped discharges which occasionally arise in cells. They differ in many essential aspects from the regular discharges set up by the generator action. It is proposed that grouped discharges occur only when invasion of dendrites is not synchronous, due to a delay in excitation spread between soma and dendrites. Each impulse in a group is assumed to be caused by an impulse in at least one of the large dendrite branches. Depolarization of dendrites abolishes the grouped activity by facilitating invasion of the large dendrite branches.