Principal neurons in layer III of the rat lateral entorhinal cortex (LEC) generate a self-sustained plateau potential and persistent spiking following the application of a brief supra-threshold excitatory stimulus delivered in the presence of the muscarinic receptor agonist carbachol. This persistent activity can be terminated by application of a second excitatory stimulus, and these cells can be repeatedly toggled between "On" and "Off" states by consecutive excitatory stimuli. However, the ionic mechanisms that underlie the production of "On" and "Off" states in layer III LEC neurons are unknown, but appear to involve activity-dependent conductances, since they can be initiated by trains of action potentials evoked by either depolarizing current pulses applied to the cell, or by repetitive spiking induced by activation of excitatory synaptic inputs. In this study we obtained intracellular recordings from rat layer III LEC neurons in-vitro, and a series of pharmacological and ionic substitution experiments were performed to identify mechanisms involved in the induction and termination of persistent spiking. Our data indicate that initiation of the "On" state depends on spike-evoked calcium influx and subsequent activation of calcium-activated non-selective cationic current. Moreover, we show that termination of persistent firing in response to an excitatory stimulus can be blocked by tetraethylammonium or iberiotoxin, suggesting that the activation of calcium activated potassium current mediated by BK channels is required to induce the "Off" state.