Chandelier or axo-axonic cells are the most selective of all cortical GABAergic interneurons, because they exclusively contact axon initial segments of cortical glutamatergic neurons. Owing to their privileged location on initial segments, axo-axonic cells have often been assumed to have the ultimate control of pyramidal cell output. Recently, key molecules expressed at the initial-segment synapses have been identified, and novel in vitro and in vivo electrophysiological studies have revealed unexpectedly versatile functional effects exerted by axo-axonic cells on their postsynaptic targets. In addition, there is also emerging recognition of the mechanistic involvement of these unique cells in several neurological diseases, including epilepsy and schizophrenia.