The physiology of the peripheral hearing organ is briefly reviewed with respect to the various transducer mechanisms in the cochlea: 1. the mechano-electrical conversion resulting in the generation of cochlear microphonics and summating potentials, 2. the electrochemical processes in the hair cell-neuron synaps with respect to the indirect evidence for the quanta] nature of synaptic transmission, 3. the stochastic trigger mechanism of the cochlcar-ncrve fibres and the composition of the compound action potential. A detailed description of the stimulus-related cochlear potentials is given with respect to the usefulness in human electrocochleography. It is concluded that the cochlear microphonics cannot provide information about the integrity of the hair cells outside the most basal part of the cochlea and is therefore not useful for electrocochleography. The discrimination between a negative summating potential and a broad compound action potential based on adaptation measurements is elucidated. Desynchronization of the firings of a nerve-fibre population–either induced or pathological–may augment the threshold of the compound action potential, referred to the psycho-acoustic one, by as much as 20 dB. This must be kept in mind when performing clinical electrocochleography. It is argued that the high-intensity frequency specificity of AP recordings will be less than at the threshold level.