The physicochemical basis of bioelectrical potentials, resting membrane potential, and action potential have been described in this chapter to get a glimpse of how excitation occurs in a nerve and muscle. The methods of study of ionic currents during excitation, properties of action potential, relationship between excitability and action potential, relationship between strength and duration of excitation have been explained with suitable diagrams. The details of local potentials and mechanism of nerve conduction provide a better understanding of nerve function. The chapter also deals with the structure and functions of neuron and glial cells. The nerve fiber types and Wallerian degeneration have also been described.