A discussion has been made of the various mechanisms that have been proposed to account for the analgesic actions of morphine-like drugs. In order to substantiate the hypothesis that N-dealkylation of the analgesic drug is the first step in the reaction sequence leading to analgesia, the ability of brain tissues to demethylate analgesic drugs has been investigated. It was shown that homogenates prepared from the brains of three species were not able to demethylate any of three analgesic drugs used in the experiments. Various attempts to stimulate activity by the addition of essential co-factors, or pretreatment of the animals, were unsuccessful. However, brain nuclei and mitochondria were found to contain factors which inhibited the liver demethylase enzyme. The significance of these results with regard to the N-dealkylation hypothesis has been discussed. The effects of analgesic drugs on the contractions of electrically stimulated guinea pig ileum has been studied. The depression of contractions, produced by low concentrations of morphine-like drugs, was due to their effect in reducing the amount of acetylcholine released from the stimulated ileum. The spontaneous release of acetylcholine from the gut was also reduced by analgesic drugs. Only drug isomers with analgesic activity reduced the contractions of electrically stimulated guinea pig ileum. A correlation between the abilities of drugs to reduce the contractions of the stimulated gut, and their analgesic potency, was found to exist. Both effects of morphine-like drugs were antagonised by low concentrations of nalorphine. It is suggested that analgesic drugs may act by depressing the release of acetylcholine from certain brain neurons.