Penicillin applied locally to the surface of in vivo hippocampus or neocortex is known to produce not only periodic interictal spikes within a focus, but also altered cellular activities around the focus. In the zone adjacent to a hippocampal focus, for example, Dichter and Spencer recorded hyperpolarization-depolarizing burst-hyperpolarization sequences, while further from the focus they recorded only hyperpolarizations (presumably IPSPs). We use here our previously developed model of interictal spike generation to show that these observations can be explained by the following two assumptions: (1) there is a gradient of effectiveness of synaptic inhibition (small within the focus and increasing with distance from the focus) caused by the gradient of penicillin concentration; and (2) the radius for recurrent inhibition is larger than the radius for recurrent excitation. Our model best fits the experimental data if we assume further that recurrent excitation extends from any one small cortical region to only some--not all--of its neighboring regions.