The ionic basis and spatial localizations of spike generation were examined in normal and axotomized goldfish Mauthner (M-) cells using intra- and extracellular recordings and pharmacological manipulation of ionic conductances, including localized iontophoretic drug applications. Tetrodotoxin (TTX) abolished both the initial segment (IS) spike in normal cells and the larger, two-component action potential in axotomized cells, whereas calcium (Ca2+) blockers did not. Thus, sodium (Na+) appears to be the major inward current carrier in both cases. A shoulder or plateau following the fast-rising Na+-dependent action potential was unmasked in both normal and axotomized M-cells by intracellular injections of tetraethylammonium (TEA), either alone or in conjunction with 4-aminopyridine (4-AP) or cesium (Cs+). This plateau potential was abolished by superfusing with saline containing the Ca2 antagonists, Co2+, Mn2+, or Cd2+. However, barium (Ba2+), which normally substitutes for Ca2+ and also blocks K+ conductances, did not produce a plateau spike, and no action potentials could be evoked in the presence of TTX. Simultaneous extra- and intracellular recordings from the soma and lateral dendrite revealed that both the full-sized axotomized spike and its individual labile components were always maximal at the soma. These data support the earlier suggestion that the axotomy-induced electrogenicity is primarily localized to that region. Iontophoretic application of TTX inside the axon cap, a distinctive neuropil surrounding the initial segment and the axon hillock and circumscribed by a glial border, and at various positions along the lateral dendrite confirmed the Na+-dependency of the action potentials recorded in normal and axotomized cells and further demonstrated that the soma generates the additional spike component in the latter. The results suggest that axotomy causes a persistent change in voltage-gated Na+ channel distribution in the M-cell, with Na+ channels appearing or becoming more numerous in the soma while becoming less concentrated in the initial segment-axon hillock. Possible related shifts in other voltage-dependent conductances are also discussed. Finally, these are the first detailed studies of the ionic basis of axotomy-induced electrogenicity in a vertebrate neuron, central or peripheral, and the similarity to the results obtained with invertebrate neurons suggests common mechanisms underlying the axon reaction.