This article describes a process theory based on active inference and belief propagation. Starting from the premise that all neuronal processing (and action selection) can be explained by maximizing Bayesian model evidence-or minimizing variational free energy-we ask whether neuronal responses can be described as a gradient descent on variational free energy. Using a standard (Markov decision process) generative model, we derive the neuronal dynamics implicit in this description and reproduce a remarkable range of well-characterized neuronal phenomena. These include repetition suppression, mismatch negativity, violation responses, place-cell activity, phase precession, theta sequences, theta-gamma coupling, evidence accumulation, race-to-bound dynamics, and transfer of dopamine responses. Furthermore, the (approximately Bayes' optimal) behavior prescribed by these dynamics has a degree of face validity, providing a formal explanation for reward seeking, context learning, and epistemic foraging. Technically, the fact that a gradient descent appears to be a valid description of neuronal activity means that variational free energy is a Lyapunov function for neuronal dynamics, which therefore conform to Hamilton's principle of least action.
