We present experiments indicating that specific and efficient interactions among neurons can be mediated by the increase in extracellular potassium ion concentration as a consequence of a single action potential in one neuron. Intracellular recording and stimulation from adjacent giant interneurons (GIN) of the cockroach Periplaneta americana reveals reciprocal synaptic interactions at the level of the metathoracic ganglion (T3). The reciprocal synaptic interaction (GGSP) is characterized by: a short synaptic delay (1 ms), fast rise time (1-1.5 ms), an amplitude of 5-8 mV and a long decay time (60-100 ms). The GGSP is not blocked by the addition of 5 mM cobalt ions and is insensitive to trans membrane voltage. The possibility that the GGSP is mediated by an electrotonic synapse was ruled out by experiments which showed that no direct current spread takes place between adjacent giant axons. Intracellular injection of TEA caused prolongation of the action potential of the injected fiber. The rate of rise and amplitude of the GGSP in the second fiber was significantly reduced. These results are consistent with the interpretation that the GGSP is mediated by the accumulation of potassium ions in the extracellular space. Serial cross sections for electron microscope reveal that the plasma membrane of adjacent GINS comes into close proximity (7-10 nm). These regions may serve as the site for the potassium mediated interactions.