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A new method for the formation of patterned neural networks in culture was developed. The combination of a cell positioning technique with control of neurite outgrowth made it possible to form simplified neural networks. Rat cerebral cortex neurons were cultured on patterned substrates containing transparent electrodes, using a novel masking technique for cell placement. After 2 weeks in culture, ordered functional networks were successfully obtained. Multlsite electrical activity and intracellular calcium concentration were recorded simultaneously from the culture. Under low magnesium conditions, the networks showed periodic bursting, synchronized between neurons at different sites. Calcium transients were synchronized with the electrical activity. The method described offers a promising approach for the study of Information processing In biological neural systems.