Amacrine cells in the external plexiform layer of the fly's lamina have been intracellulary recorded and dye-filled for the first time. The recordings demonstrate that like the lamina's short photoreceptors R1–R6, type 1 lamina amacrine neurons exhibit nonspiking, “sign-conserving” sustained depolarizations in response to illumination. This contrasts with the sign-inverting responses that typify first-order retinotopic relay neurons: monopolar cells L1–L5 and the T1 efferent neuron. The contrast frequency tuning of amacrine neurons is similar to that of photoreceptors and large lamina monopolar cells. Initial observations indicate that lamina amacrine receptive fields are also photoreceptor-like, suggesting either that their inputs originate from a small number of neighboring visual sampling units (VSUs), or that locally generated potentials decay rapidly with displacement. Lamina amacrines also respond to motion, and in one recording these responses were selective for the orientation of moving edges. This functional organization corresponds to the anatomy of amacrine cells, in which postsynaptic inputs from several neighboring photoreceptor endings are linked by a network of very thin distal processes. In this way, each VSU can receive convergent inputs from a surround of amacrine processes. This arrangement is well suited for relaying responses to local intensity fluctuations from neighboring VSUs to a central VSU where amacrines are known to be presynaptic to the dendrites of the T1 efferent. The T1 terminal converges at a deeper level with that of the L2 monopolar cell relaying from the same optic cartridge. Thus, the localized spatial responses and receptor-like temporal response properties of amacrines are consistent with possible roles in lateral inhibition, motion processing, or orientation processing.