Despite its broad acceptance as a safe and effective surgical therapy for advanced Parkinson's disease (PD), deep brain stimulation (DBS) has remained enigmatic with respect to its mechanism(s). Because DBS of subthalamic nucleus (STN) mimics the therapeutic effects of STN lesion, it was originally thought that the high frequency (> 100 Hz) necessary to relieve motor symptoms in PD patients causes functional inactivation of STN neurons (depolarization block), but this notion has been challenged. Here, we performed whole-cell and extracellular recordings in rat brain slices that preserved the synaptic connectivity between STN and substantia nigra (SN). STN-DBS at 130 Hz almost completely disrupted excitatory postsynaptic currents (EPSCs) in SN neurons. Upon switching on and off high-frequent stimulus trains, EPSCs rapidly declined and recovered, respectively. To determine whether the loss of excitatory synaptic transmission in the STN-SN projection results primarily from a failure of the synaptic machinery or from axonal conduction block, we performed extracellular recordings that allowed us to record simultaneously axonal activity (fiber volley) and synaptic signals (field EPSPs). The DBS-induced decline of fEPSPs in SN was always associated with suppression of axonal action potentials. This strongly suggests that the loss of synaptic transmission during DBS is secondary to the failure of axonal impulses to reach presynaptic terminals. Thus DBS emerges as a powerful means to functionally isolate basal ganglia circuitry from pathological activity arising within STN.