Effects of halothane on the excitation-contraction coupling or neuro-effector transmission in the dog tracheal muscle were observed in vitro in an attempt to clarify the cellular mechanisms involved in anesthetic-induced bronchodilation. Double sucrose gap, microelectrode, and tension recording methods were used. Application of halothane evoked an initial induction of phasic contraction with no alteration in the electrical membrane properties, and secondarily a reduction in muscle tone with membrane hyperpolarization. Halothane suppressed the amplitude of the twitch contractions evoked by indirect (nerve mediated) or direct muscle stimulation, the degree of suppression being greater with the former stimulation. The threshold membrane depolarization required for the generation of tension development was increased. In the presence or absence of TEA, halothane completely suppressed the generation of an action potential or a local response in the muscle membrane, following stimulation by outward current pulses. Therefore, halothane has complex actions on Ca++ economy in the tracheal smooth muscle cell, i.e., initial release of Ca++ from the store sites followed by inactivation or a reduction in free calcium ions in the cytoplasm, and/or suppression of the influx of Ca++ across the cell membrane. Low concentrations of halothane (less than or equal to 1%) suppressed the amplitude of excitatory junction potential (EJP) without altering the membrane potential, membrane resistance, or muscle sensitivity to acetylcholine. Therefore, this anesthetic probably suppresses the release of transmitter from the nerve terminals. Halothane also suppressed the facilitation phenomena of EJP during repetitive nerve stimulation. These direct inhibitory effects of halothane on smooth muscle cells and excitatory neuro-effector transmission could account for the potent bronchodilator action of this anesthetic.