There is clear evidence of a signalling role for nitric oxide (NO) in the brain, although demonstration of activity-dependent NO generation is often problematic, since such low levels are required for physiological actions. Many studies have focused on mechanisms associated with changes in synaptic strength and synaptic plasticity. The medial nucleus of the trapezoid body (MNTB) is an ideal site in which to study NO signalling: it has a well characterised excitatory synaptic input (the calyx of Held), in situ hybridisation (1) shows that the MNTB expresses neuronal nitric oxide synthase (nNOS) and both presynaptic and postsynaptic sites are amenable to patch recording, with synaptic responses and voltage-gated currents being well characterised. Principal neurons of the MNTB receive a large glutamatergic input from the calyx of Held synapse and their output provides an inhibitory glycinergic projection to two nuclei which first compare auditory inputs from both cochleae. These binaural comparisons occur in the medial and lateral superior olivary nuclei and underlie sound-source localization. The large magnitude of the calyx EPSC guarantees that the MNTB neuron will reach action potential (AP) firing threshold, with minimal latency jitter. Although several forms of short-term facilitation and depression have been noted at this synapse, long-term synaptic plasticity has not been observed. I will present evidence that sustained changes in transmission at this site are mediated by modulation of postsynaptic potassium channels rather than by changes in presynaptic transmitter release. Synaptic activity activates neuronal nitric acid synthase (nNOS), generates nitric oxide (NO) and regulates to postsynaptic excitability (2). High frequency stimulation of the calyx of Held synapse caused NMDAR-dependent generation of NO, as assessed by DAR-4M imaging and raised intracellular cGMP. Patch-clamp recordings showed a small reduction in synaptic strength, but the predominant change was reduction in the amplitude of outward potassium currents underlying AP repolarisation. This phenomenon was mimicked by perfusion of NO-donors and blocked by nNOS antagonists. Closer examination showed that Kv3 potassium currents were suppressed in neurons receiving an active calyceal input and also reduced in adjacent non-innervated neurons. This NO signalling pathway mediates activity-dependent (and hence sound-driven) slowing of AP time-course and increased transmission failure in both innervated and non-innervated MNTB neurons. We conclude that NO is serving as a volume transmitter, suppressing postsynaptic currents and the efficacy of transmission at this relay synapse during sustained stimulation. This mechanism mediates a general modulation in both active and inactive neurones, thereby tuning a population of cells to the ongoing activity across the nucleus, rather than the activity at any one synapse or target neuron.