Transmitter receptors are localized to discrete cellular sites such that only those responses appropriate for a particular pattern of inputs are activated. How neurons select between synaptic and extrasynaptic responses during development is not understood. We have investigated how contact during synapse formation between identified leech neurons selectively suppresses the modulation of extrasynaptic channels by protein kinase C. A microelectrode with an isolated membrane patch containing channels from an uninnervated target neuron was 'crammed' into a similar cell contacted by a presynaptic partner. We report here that within a few minutes, the crammed channels were rendered insensitive to activation of protein kinase C, demonstrating the action of a cytoplasmic signal. Treatment of the neurons with selective inhibitors of tyrosine kinases, which are signalling molecules during normal and oncogenic cellular differentiation, prevented the loss of channel modulation. Thus, tyrosine kinases mediate early functional changes during specific synapse formation that are induced by neuronal contact.