Serotonin (5-HT) is widely implicated in brain functions and diseases. The vertebrate brain is extensively innervated by 5-HT fibres originating from the brain stem, and 5-HT axon terminals interact with other neurones in complex ways. The cellular mechanisms underlying 5-HT function in the brain are not well understood. The present study examined the effect of 5-HT on the responsiveness of neurones in the neocortex. Using patch-clamp recording in acute slices, we showed that 5-HT substantially increased the slope (gain) of the firing rate-current curve in layer 5 pyramidal neurones of the rat prefrontal cortex. The effect of 5-HT on gain is confined to the range of firing rate (0-10 Hz) that is known to be behaviourally relevant. 5-HT also changed current threshold for spike train generation, but this effect was inconsistent, and was independent of the effect on gain. The gain modulation by 5-HT was mediated by 5-HT2 receptors, and involved postsynaptic mechanisms. 5-HT2-mediated gain increase could not be attributed to changes in the membrane potential, the input resistance or the properties of action potentials, but was associated with a reduction of the afterhyperpolarization and an induction of the slow afterdepolarization. Blocking Ca2+ entry with Cd2+ increased the gain by itself and blocked 5-HT2- mediated gain increase. Buffering [Ca2+](i) with 25 mM EGTA also substantially reduced 5-HT2- mediated gain increase. Noradrenaline, which blocked the afterhyperpolarization, also induced a moderate increase in gain. Together, our results suggest that 5-HT may regulate the dynamics of cortical circuits through multiplicative scaling.