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Longitudinal intrafascicular electrodes (LIFEs) are fine electrodes threaded into the extracellular space between axons in peripheral nerves or spinal roots. The authors are developing these electrodes for application in functional electrical stimulation and in basic physiology. An area of concern in chronic recording application of LIFEs is the possibility of electromyogram and other external noise sources masking the recorded neural signals. The authors characterized neural signals recorded by LIFEs and confirmed by three independent methods that increasing interelectrode spacing for bipolar LIFEs increases signal amplitude. The spectrum of neural signal from bipolar and monopolar LIFE lies between 300 Hz and 10 kHz. The amplitude of the spectrum increases with increasing interelectrode spacing, although the distribution is not affected. Single unit analysis of LIFE recordings show that they record selectively from units closest to the electrode active site. Units with conduction velocities ranging from 50-120 m/s were identified. Extraneural noise, as stimulus artifact or electromyogram, is much reduced with bipolar LIFE recording, as compared to monopolar recordings. Relative improvement in neural signal to extraneural noise increases with interelectrode spacing up to about 2 mm. Since there is no further improvement beyond 2 mm, the authors conclude that the preferred interelectrode spacing for bipolar LIFEs is 2 mm.