Local anesthetic drugs interfere with excitation and conduction by action potentials in the nervous system and in the heart by blockade of the voltage-gated Na channel. Drug affinity varies with gating state of the channel. The drugs show low affinity at slow excitation rates, but high affinity when the channels are opened and inactivated during action potentials at high frequency, as they are during pain or during a cardiac arrhythmia. The drugs are thought to access their binding site in the inner pore by passage through the membrane and entry through the inner pore vestibule. There have been three major developments in the last decade that greatly increase our understanding of their mechanism of action. Firstly, amino acid residues critical to drug binding have been located by mutagenesis, and it is possible to develop a molecular model of the drug binding site. Secondly, a path for drug access directly from the outside has been characterized in the cardiac isoform of the channel. Thirdly, the hypothesis that high affinity binding stabilizes the fast inactivated conformation of the channel has been challenged. Rather, the drug may stabilize a slow inactivated state and immobilize the voltage sensor in domain III in its activated outward position. The combination of mutational study of the cloned Na channels and patch clamp offers the opportunity to understand the detailed molecular mechanism of drug action and to resolve drug structure-function.