General anaesthetics cause sedation, amnesia and hypnosis. Although these clinically desired actions are indicative of an impairment of neocortical information processing, it is widely held that they are to a large part mediated by subcortical neural networks. Anaesthetic action on brain stem, basal forebrain and thalamus, all of which are known to modulate cortical excitability, would thus ultimately converge on neocortex, perturbing and reducing action potential activity therein. However, as neocortex harbours molecular targets of anaesthetics in high densities, notably GABAA receptors, neocortex itself should be very sensitive to anaesthetics. Here, we performed experiments to reveal the extent to which neocortex proper is a relevant target of the low concentrations of volatile anaesthetics causing sedation and hypnosis. We compared the effects of isoflurane, enflurane and halothane on spontaneous action potential activity of rat neocortical neurons in vivo and in isolated cortical networks in vitro, i.e. in the presence and absence of subcortical arousal systems. We observed that the anaesthetics decreased spontaneous firing of neurons via intracortical mechanisms; concentrations inducing hypnosis in humans reduced discharge rates both in vivo and in vitro to the same extent, approximately 50%. This decrease in neuronal activity was paralleled by a significant enhancement of neocortical GABAA receptor-mediated inhibition. These findings challenge the notion of predominantly subcortical effects of volatile anaesthetics and suggest that intracortical targets, among them neocortical GABAA receptors, mediate the sedative and hypnotic properties of volatile anaesthetics.