Inhibition in the Limulus lateral eye in situ is qualitatively similar to that in the excised eye. In both preparations ommatidia mutually inhibit one another, and the magnitude of the inhibitory effects are linear functions of the response rate of individual ommatidia. The strength of inhibition exerted between single ommatidia is also about the same for both preparations; however, stronger effects can converge on a single ommatidium in situ. At high levels of illumination of the retina in situ the inhibitory effects are often strong enough to produce sustained oscillations in the discharge of optic nerve fibers. The weaker inhibitory influences at low levels of illumination do not produce oscillations but decrease the variance of the optic nerve discharge. Thresholds for the inhibitory effects appear to be determined by both presynaptic and postsynaptic cellular processes. Our results are consistent with the idea that a single ommatidium can be inhibited by more of its neighbors in an eye in situ than in an excised eye. Leaving intact the blood supply to the eye appears to preserve the functional integrity of the retinal pathways which mediate inhibition.