Transfer characteristics of the synapse made from second- to third- order neurons of cockroach ocelli were studied using simultaneous microelectrode penetrations and the application of tetrodotoxin. Potential changes were evoked in second-order neurons by either an extrinsic current or a sinusoidally modulated light. The synapse had a low-pass filter characteristic with a cutoff frequency of 25-30 Hz, which passed most presynaptic signals. The synapse operated at an exponentially rising part of the overall sigmoidal input/output curve relating pre- and postsynaptic voltages. Although the response of the second-order neuron to sinusoidal light was essentially linear, the response of the third-order neuron contained an accelerating nonlinearity: the response amplitude was a positively accelerated function of the stimulus contrast, reflecting nonlinear synaptic transmission. The response of the third-order neuron exhibited a half- wave rectification: the depolarizing response to light decrement was much larger than the hyperpolarizing response to light increment. Nonlinear synaptic transmission also enhanced the transient response to step-like intensity changes. I conclude that (a) the major function of synaptic transmission between second- and third-order neurons of cockroach ocelli is to convert linear presynaptic signals into nonlinear ones and that (b) signal transmission at the synapse between second- and third-order neurons of cockroach ocelli fundamentally differs from that at the synapse between photoreceptors and second- order neurons of visual systems so far studied, where the synapse operates in the midregion of the characteristic curve and the transmission is essentially linear.