Experiments with the C fibres of the rabbit vagus nerve have established that heat is evolved during the depolarizing phase of the action potential and is absorbed during the repolarizing phase. Subsequent studies using the pike olfactory nerve indicate that the heat production begins at a high rate very early in the depolarizing phase and is completed in advance of the peak of the spike. This would be expected if the heat arises from the energy released by the discharge of the membrane capacitance which varies as the square of the membrane potential; but estimates of the stored energy fall short of the observed heat production by a factor of two or three times. The prominent cooling phase suggests that a substantial part of the heat may arise from an entropy change. Such an entropy change would be expected to result from the change in the electrical stress in the dielectric of the membrane capacitance, and may thus be a manifestation of reversible changes in the molecular architecture of the insulating matrix of the membrane.