A formidable challenge for the visual system is to encode the statistical variability in the visual environment. For example, the vital statistics of contrast and luminance vary by several orders of magnitude within an image and during global changes in overall viewing conditions. The range of visual signals far exceeds the dynamic range of neurons in the retina.Traditional views dictate that during the visual contrast processing the retinal circuitry undergoes adaptation and thereby extends its dynamic range. This is intuitively appealing. However, recent studies have demonstrated an opposite form of plasticity – facilitation. Both adaptation and facilitation originate at the synaptic terminals of the bipolar cells. A combination of adaptation and facilitation might help to detect both an increase and decrease in contrast. However, the mechanisms underlying such plasticity and subsequent neural coding are largely unknown and my work will focus on studying these questions.This requires studying the properties of synaptic terminals of bipolar cells and that of amacrine cells which provide lateral inhibitory input. I shall use multiphoton microscopy to do in vivo measurements in the retina of zebrafish larvae. I shall monitor calcium signals and exo-and endocytosis of neurotransmitter vesicles at the synaptic terminals of both bipolar and amacrine cells under spatio-temporally different contrast illuminations. The calcium signals and vesicle activity will be simultaneously monitored using novel genetically encoded reporters of varying spectral properties. Secondly, I shall study the role of various neurotransmitters in modulating synaptic activity. Finally, I shall study how opposite forms of plasticity segregate into different layers of the retinal circuitry.Similar challenges for neural coding exist in other sensory systems. The insights gained from studying synaptic bases of neural coding in the retina will improve our general understanding of neural function.